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 [...]
Tag Archives: price action
Trade price analysis
June 24, 2009 – 4:13 pm
Trade price analysis involves monitoring price action, in order to gain an insight into the short term sentiment of the market. Determining who is in control at that time – the bulls or the bears. And assessing how they’re likely to respond to changes in the market. Price analysis is much more than just watching for your favorite candlestick patterns.
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 [...]
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