Predictability of Technical Trading Rules in the Cryptocurrencies

Posted on March 16, 2022 By Harbourfront Technologies

Cryptocurrency trading is the process of buying and selling digital assets in order to make a profit. Cryptocurrency trading can be a profitable activity, but it also comes with a lot of risks. In order to be successful at trading, you need to have a solid understanding of the market …

Artificial Intelligence for Delta Hedging

Posted on March 13, 2022 By Harbourfront Technologies

Financial risk management is the process of identifying, measuring, and managing financial risks. There are many different types of financial risks, including interest rate risk, credit risk, liquidity risk, market risk, and operational risk. Machine learning and artificial intelligence can be used to identify and measure these risks, as well …

Feedback Effect in the Foreign Exchange Market

Posted on March 10, 2022 By Harbourfront Technologies

The Black–Scholes-Merton model is the most frequently used option pricing model in the financial industry. However, it made use of assumptions that are not always realistic. A crucial assumption of the Black-Scholes-Merton model is a frictionless and elastic market. In other words, it assumes that there are no barriers to …

Is Correlation Modeled Correctly?

Posted on March 7, 2022 By Harbourfront Technologies

Volatility is a concept that is relatively well understood and used widely in the financial market. Correlation, on the other hand, is less understood. Nevertheless, it is used frequently in trading and portfolio management. Correlation between 2 assets is a measure that shows the strength of the relationship between them. …

Do Retail Traders Have an Edge?

Posted on March 4, 2022 By Harbourfront Technologies

In order to win in trading, one should have an edge, i.e. have a slight advantage over others. This means having information or strategies that the majority of other traders don’t have. There are a few different ways to get an edge in the trading world. One is by having …

Technical Trading in the Foreign Exchange Market

Posted on March 1, 2022 By Harbourfront Technologies

Technical trading is a method of analyzing securities by studying past price movements and trends. Based on this analysis, traders then make decisions about what trades to make. Technical traders use indicators to develop algorithmic trading systems. These trading systems are popular in the equity and commodity futures markets. Reference …

Post-Earnings-Announcement Drift in the Corporate Bond Market

Posted on February 26, 2022 By Harbourfront Technologies

Post-earnings-announcement drift (PEAD) is the tendency for a stock’s price to move in the direction of an earnings surprise for several weeks, or even months, following an earnings announcement. PEAD is a well-known phenomenon in the equity market, and trading strategies developed based on it resulted in superior returns. Reference …

Do Stop-Loss Orders Add Value?

Posted on February 23, 2022 By Harbourfront Technologies

A stop-loss order is an order to buy or sell a security when the price reaches a certain level. A stop-loss order is designed to limit an investor’s losses on a position in a security. There are two main types of stop-loss orders: stop market orders and stop-limit orders. A …

Historical Volatility-Online Calculator

Posted on February 22, 2022 By Harbourfront Technologies

Historical volatility is a prevalent statistic used by options traders and financial risk managers. Historical volatility measures the past fluctuations in the price of an underlying asset. When there is a rise in historical volatility, a security’s price will also move more than normal. At this time, there is an …

Is There an Error in the Black–Scholes-Merton Model?

Posted on February 20, 2022 By Harbourfront Technologies

The Black–Scholes-Merton (BSM) model is a renowned option pricing model used widely in financial markets. It was published by Fischer Black, Myron Scholes , and then Robert Merton in the early 1970s. Scholes and Merton later received the Nobel Memorial Prize in Economic Sciences for their work (Black died before …