Category Archives: Strategy Development

Overcome the Odds

Posted on August 14, 2014 by

I heard something remarkable this morning that reminded me just how ill-suited the human brain is for making investment decisions. The inherent decision-making deficiencies that we all share are well documented in decades of behavioral economics and behavioral finance studies, … Continue reading →

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Posted in Market Commentary, Market Timing, Recession Forecasting Model, Risk Management, Strategy Development, Uncategorized | Tagged , , | Leave a comment

Divergence Strategies Generate High-Probability Trades

Posted on May 22, 2014 by

Divergences are simple conceptually.  When prices are making higher highs and higher lows and a predictive indicator, such as market breadth, is making lower highs and lower lows, then the indicator has diverged from price and the upward price trend … Continue reading →

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Posted in Market Breadth, Market Sentiment, Market Timing, Relative Strength, Strategy Development, Technical Analysis | Tagged , , , , , , | Leave a comment

2013 Trader Edge Strategy Research

Posted on January 30, 2014 by

I don’t write about it often on Trader Edge, but most of my work the past year has been on option strategies.  As a rule, I do not trade strategies unless they demonstrate a significant advantage in back and forward … Continue reading →

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Posted in Options, Strategy Development | Tagged , , , , , , , , | Leave a comment

Choosing the Optimal Strategy

Posted on January 23, 2014 by

When you backtest systematic, rule-based strategies and your theory finally identifies a proven market inefficiency, you will face an interesting problem: which profitable trading strategy should you choose.  Optimization tools test a number of strategies that are all based on … Continue reading →

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Posted in Risk Management, Strategy Development, Technical Analysis | Tagged , , , , | 2 Comments

Pyramid Trading: Enhancing Returns without Increasing Risk

Posted on September 26, 2013 by

Last week I introduced a framework for adding to losing positions safely.  It is also possible to enhance returns without increasing risk by adding to your winning positions.  The approach is called pyramid trading (not to be confused with pyramid … Continue reading →

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Posted in In-Depth Article, Risk Management, Strategy Development | Tagged , , , , , , | Leave a comment

Doubling Down: Enhancing Returns without Increasing Risk

Posted on September 19, 2013 by

Adding to losing positions is a sucker’s game and playing this game continues to bankrupt an ever-expanding group of traders and investment managers. As a rule, traders should never add to losing positions.  However, there are exceptions to every rule.  … Continue reading →

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Posted in In-Depth Article, Risk Management, Strategy Development | Tagged , , , , , , , | 1 Comment

The Three Things that Move the Market

Posted on August 29, 2013 by

The equity market seems complex, but it is really much simpler than you think.  There are only three things that move the market.  The following article will identify the three cause and effect relationships and use this framework to examine … Continue reading →

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Posted in Economic Indicators, Fundamental Analysis, Market Commentary, Market Sentiment, Market Timing, Strategy Development | Tagged , , , , | Leave a comment

Top 10 Trader Edge Articles

Posted on August 22, 2013 by

I started Trader Edge almost 18 months ago and it just occurred to me that I had never provided a list of the most popular articles on the site.  If you did not get a chance to read these articles … Continue reading →

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Posted in AmiBroker Code, Futures, Market Breadth, Market Timing, Risk Management, Strategy Development, Technical Analysis | Tagged , , , , , , , , | Leave a comment