Probabilities of a Recession in 2023

Posted on July 31, 2022 By Harbourfront Technologies

A recession is a significant decline in economic activity spread across the economy, lasting more than a few months. It is visible in industrial production, employment, real income, and wholesale-retail trade. The technical indicator of a recession is two consecutive quarters of negative economic growth as measured by a country’s …

How Effective Is Technical Analysis?

Posted on July 29, 2022 By Harbourfront Technologies

Technical analysis is the study of past price patterns to identify market trends and trading opportunities. Technical analysts believe that the collective actions of all participants in the market, including buyers and sellers, producers and consumers, investors and speculators, etc., influence asset prices. By analyzing price data, technical analysts aim …

Does Herding Behaviour Exist in the Commodity Markets?

Posted on July 24, 2022 By Harbourfront Technologies

In the financial markets, herding behaviour is often exhibited by investors following the crowd and buying or selling assets based on the actions of others, rather than making their own independent decisions. This can lead to market bubbles and crashes as everyone rushes to buy or sell at the same …

Using Realized Volatility to Forecast Implied Volatility

Posted on July 20, 2022 By Harbourfront Technologies

Implied volatility is a measure of the expected fluctuations in a security’s price. It is used by options traders to gauge the market’s expectations for the future volatility of the underlying security. A higher implied volatility means that the market is expecting a greater price movement, while a lower implied …

Investing During Inflationary Periods

Posted on July 17, 2022 By Harbourfront Technologies

Inflation is often thought of as a rise in the prices of goods and services. While this is true, inflation is actually an increase in the money supply. When there is more money chasing after goods and services, prices will naturally rise. This puts investors in a difficult position because …

Max Pain Theory in Practice

Posted on July 14, 2022 By Harbourfront Technologies

Max pain theory is a theory that suggests that the stock price movements are influenced by the options’ expiration. The max pain theory posits that the underlying asset of an option will move in such a way that it causes the most pain to the largest number of option holders. …

Volatility Feedback Loop in the VIX Index and Its Derivatives

Posted on July 11, 2022 By Harbourfront Technologies

The VIX index is a measure of the stock market’s expectation of volatility over the next 30 days. The VIX futures are derivative contracts that allow traders to bet on the future direction of the VIX index. The VIX index is calculated using the prices of SP500 options. The VIX …

Determining Sovereign Credit Risks Using News Articles

Posted on July 8, 2022 By Harbourfront Technologies

Alternative data is becoming increasingly popular in the financial world. While some traditional data sources such as earnings and economic indicators are still relied upon heavily, alternative data is providing new insights that can help investors make better-informed decisions. There are a variety of sources for alternative data, including social …

Arbitrage Trading in the Cryptocurrency Market

Posted on July 5, 2022 By Harbourfront Technologies

Cryptocurrency is a digital or virtual asset that uses cryptography to secure its transactions. Cryptocurrencies are decentralized, meaning they are not subject to government or financial institution control. Bitcoin, the first and most well-known cryptocurrency, was created in 2009. Cryptocurrencies are often traded on decentralized exchanges and can also be …

Turtle Trading System Revisited: Is It Still Profitable?

Posted on July 2, 2022 By Harbourfront Technologies

The Turtle trading system is a system where a group of traders follow specific rules to buy and sell commodities. The rules are based on the observations of Richard Dennis, who believed that anyone could be taught to trade successfully if they followed a set of simple rules. The Turtles …