discover
Seasonal trading isn’t just market folklore it’s grounded in decades of recurring patterns influenced by investor behavior, macroeconomic cycles, and calendar-based events. If you understand the rhythms of the market, you can align your trades with high-probability windows that give you an edge.
8
min read
The goal of this research is to find various set-ups and exit strategies that could be used for trading the opening range breakouts. The time frames we will be looking at are 10min, 15min and 30min opening range breakouts. We will focus our attention on the very liquid futures markets in particular we will analyze the S&P500 futures. We would like to encourage you as the reader to participate in the discussion and share your knowledge and/or ideas about opening range trading systems.
11
When it comes to trading there is a common belief that most behavior in markets can be explained by assuming that market participants make ‘logical’ trading decisions. In reality we know it’s not that easy. However there are market movements that are predictable because they repeat every year. We call this seasonal movement. You don’t have to be a math wizard to see seasonal cyclic movements in assets repeating year over year. To be able to predict the movement of a particular market it’s useful to analyze the seasonal pattern over a certain time period that should usually range from 10 to 15 years.
3
The concept of diversification is based on the concept that a trader can reduce his risk exposure by entering several positions at the same time. The success of a traders portfolio is therefore based on reducing risk rather than maximizing returns.
Inter-Market Correlations for the major futures markets including time intervals of 1 Year - 6 Months - 3 Months - 1 Month
1
The trend following model by Kaufman says that trading by the direction of the trend is a conservative approach to the markets.
The number of contracts bought and sold each day in any given market, known as volume, is a good way of gauging money flow. It can predict trend changes by examining volume patterns such as sudden spikes in volume along with volatile price movements.
The commercial net positions are a mirror of the large trader net positions. Most of the time commercial net positions mirror the funds trading patterns but there are some important exceptions to this rule.
2
The COT Report is the single most important report issued by the CFTC revealing internal market dynamics.
4
Today we gonna show you something really interesting and when done correctly it can be exploited. We are talking about imbalances. You can basically do this with any time frame and any contract especially those with rising volatility and severe directional price changes for a prolonged period of time.
We want to fill a gap here. A lot of economic data is published day in and day out but yet most of us don’t really understand the lingo behind it. Let’s bring some clarity into this. Regularly we come across certain terms dealing with measures of economic activity. Most of them are pretty straight forward if you give it a chance. So let’s proceed with some of the more common concepts you will run across when analyzing economic indicators.
5
The employment situation report has a huge effect on stock and bond markets. The report is released in a timely fashion. It’s a detailed report with information about job market and household earnings.
This post will be a series of several articles describing the most important economic indicators and how you can use them in your day-to-day trading ventures.
How can you avoid the pitfalls of fundamental analysis. First of all do not do your own fundamental analysis unless you have special training or excessive experience in analyzing the data.
We illustrate our experience using the Bloomberg terminal in an equity-focused analysis. Our goal is to enable users inexperienced with the terminal to do a proper analysis. We identify the most significant challenges we face and provide a useful bloomberg cheat sheet.
In today’s uncertain markets, traders who want to spot major market moves and protect themselves against large losses should consider using spread trading.
Read Next Pairs Trading An Advanced Strategy: CAD – Crude Oil In this article we are going to talk about financial market history and why it is important for both the fundamental investor and quantitative trader to know how these events unfolded and what impact they had on the market. We put our focus on the LTCM hedge fund collapse and the lessons you can learn from it.
17
On October 13th, 2016 WINS Finance Holdings (WINS) closed at $25.22. On March 09th 2017, the obscure Chinese financial company, headquartered in New York, trades at $315. Yes $315. That is not a typo. Up +1200%. The high was on February 8th, 2017 WINS closed at $452.
A company’s 10 Q report is one of the most important tools an investor has to decide if and when a particular stock is a buy/short opportunity.
Ben Graham, the father of value investing, once said of the stock market, “In the short run, the market is a voting machine but in the long run it is a weighing machine.” To Graham the market was like a popularity contest. Investors “vote” for a stock out of considered enthusiasm for its prospects. Results however are determined in the long run as profits are “weighed” year after year and intrinsic value is revealed.
6
Read Next Ed Thorp Trading Strategy, Money Management, and Legendary Career. Ed Thorp’s Remarkable Journey: From Beating Casinos to Dominating Wall Street In the high-stakes world of financial markets, it’s not always fundamentals or technicals that move prices — it’s human emotion. Greed inflates bubbles; fear triggers crashes. Recognizing this, savvy investors look for tools that measure crowd psychology — and few are as insightful as CNN Business’s Fear & Greed Index.
Read Next Pairs Trading – A Real-World Profitable Strategy Deep learning is nothing else than probability. There are two principles involved in it, one is the maximum likelihood and the other one is Bayes. It is all about maximizing a likelihood function in order to find the probability distribution and parameters that best explain the data we are working with. Bayesian methods come into play where our network needs to say, “I am not sure”. It is at the crossing between deep learning architecture and Bayesian probability theory.
22
Read Next Identifying Anomalies in Capital Markets: Accrual Anomaly Congratulations you made it to part2 of our tutorial. Give yourself a round of applause. If you stumbled upon part2 before reading part1 we advise you to start from the beginning and read part1 first.
29
The purpose of portfolio optimization is to minimize risk while maximizing the returns of a portfolio of assets.
Read Next Dollar The dollar exchange rate as a global risk factor: evidence from investment How do we know if a price is right and when do we enter the trade ? Is the S&P 500 Index trading at 2355 for that day to high or to low. Should I buy or sell ? Proponents of the Bollinger Band say that this indicator can greatly improve your odds in being on the right side of the market.
The first step in building such a system is to define what mean reversion is. Mean reversion systems are looking for markets that are unusually high or low and will eventually return back to the mean.
Read Next 10 Key Points in a Companies 10Q Report In this article we will look at the futures market and how statistical analysis can pave the way for better trading results. What makes the statistical analysis we are going to show you even more important is the fact that you are going to learn how to increase the odds of your trading success in a simple but effective way.
7
Money management implementations should be monitored on a periodic basis if you want to maintain your exposure. Two aspects of your trading system should be monitored one is your risk and the other one is the volatility.
Volatility is the amount of daily price movements of an underlying instrument. In most cases volatility is the difference of the high and the low of the day. Of course there are more complex methods of calculating the volatility but in this article we will go with the simplest one.
Read Next Volatility Risk Management Volatiltiy Method If one thing can be called the holy grail of trading or at least come close to it then its money management. Some people call it diversification while others call it how to wisely invest your hard-earned dollar.In simple words money management is the rule book that tells you how much of your money you should put at risk for a particular trade.
The walk-forward analysis is the most crucial building block of your trading strategy. At this stage it is determined if the hypothetical returns are a result of overfitting or the result of a robust trading system. If the walk-forward analysis produces negative results you must go back to the first step of your strategy development process. The analysis answers three essential questions: is the trading system profitable, what is it the profit factor to be expected in real time trading and how will changes in market conditions affect my strategy performance.
33
The following system will help you identify range bound formations and determine optimal entry and exit points for such trades. Range bound formations occur when prices oscillate between established levels of resistance and support, forming a repetitive pattern of highs and lows. One key characteristic of these patterns is the diminishing trading volume. In this article, we will delve into the statistics and precise definitions of range bound patterns for 15-minute price intervals.
Read Next Range bound trading Mastering Mean Reversion Trading: A Guide to Identifying and Capitalizing on Range Bound Formations Most trading systems utilize indicators as a method of trading strategy design. But before building a trading system using indicators one should ask what do they indicate? The answer to that is that most of the time they are not indicating any information that can be advantageous in building a profitable trading system. The only thing that they can be used for are as noise filters
While Indiana Jones might have found it safely tucked away in the Temple of the Sun, to legendary investor Ray Dalio, the "Holy Grail" is a sweet spot between diversification and correlation.
The Spider’s Web: Britain’s Second Empire, is a documentary, which shows how Britain transformed from a colonial power into a global financial power.
A thrilling documentary about a genius algorithm builder who dared to stand up against Wall Street. Haim Bodek aka The Algo Arms Dealer. Haim Bodek is a former Goldman and UBS trader who has come firmly out against how stock exchanges work with high frequency traders. Mr. Bodek had worked with rapid-fire trading firms to give them an unfair edge over everyday investors. He became convinced exchanges were providing such an edge after he says he was offered one himself when he ran a high-speed trading firm—a way to place orders that can be filled ahead of others placed earlier. More information on the different order types can be found here.
Get notified about new articles every week!
