Backtesting and Data Mining are techniques that are influential and worthy if we use them in the approved manner, however traders often exploit them. Therefore, we’ll also explore two common pitfalls of these techniques, known as the multiple hypothesis problem and overfitting and how to overcome these pitfalls. Backtesting is just the procedure of using [...]
Category Archives: Technical Analysis
Technical Analysis: What you need to know before you start charting
June 25, 2009 – 11:15 am
Technical analysis is the study of price data and statistical indicators that are created by market movement. Market activity demonstrates the course of supply and demand. This supply and demand is an indication of ideas and opinions translated into human behavior and exclusively, herd mentality. Therefore, technical analysts would squabble, price patterns and indicator signals [...]
The Guppy Multiple Moving Average (GMMA)
June 24, 2009 – 8:35 pm
The Guppy Multiple Moving Average (GMMA) is an indicator that tracks the inferred activity of the two major groups in the market. These are investors and traders. Traders are always probing for a change in the trend. In a downtrend they will take a trade in anticipation of a new up trend developing. If it [...]
Paper and Real Money Trading
June 24, 2009 – 1:19 pm
Paper trading has its merits and demerits whether it is of value or not. In paper trading the profits are meaningless. Paper trading is an important step in the trader’s learning progression. Paper Trading Values: Simulator fill prices are not real and won’t be attainable with real money There isn’t any financial risk in paper [...]
Market Action and Reaction
June 24, 2009 – 9:56 am
Forces come in pairs. For every action, there is contrary reaction. The primary thing that comes to mind is those purchasers were willing to buy at higher and higher prices. While one certainly can have one seller selling to several buyers, they can also have multiple sellers selling to one buyer that would cause rising [...]
Gap Trading in the morning
June 24, 2009 – 9:06 am
The Art of Trading the Morning Gap Open trade is a fantastic opportunity for the smart trader who knows how to identify supply and demand. Most of the time, our entry is within seconds to minutes of the opening bell. Prices gap up because there are more buy orders at the open morning than there [...]
Trading – Technical or Fundamental?
June 23, 2009 – 5:56 pm
This learning process is for us to study about two different kinds of traders; fundamental and technical trader. For us to succeed as an online trader the differences need to be understood clearly. Both are different in their views in the methodology they use to evaluate the market trend. Though there is some binding, we [...]
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