Author: Harbourfront Technologies

Do Path-Independent Volatilities Exist?

Volatility of an asset is a measure of how much the price of that asset varies over time. In other words, it is a measure of how “risky” an investment in that asset is. The higher the volatility, the greater the risk. There are two main types of volatility: historical …

How Algorithmic Trading Impacts the Markets

Algorithmic trading is a method of executing trades using algorithms, or sets of predetermined rules, to make trading decisions. These algorithms are designed to take into account a variety of market conditions, such as price, volume, and timing. Algorithmic trading is often used by large institutional investors, such as hedge …

How to Account for Slippage in Backtesting

Backtesting is a method used by investors to develop trading systems. It involves testing a trading system on historical data to see how it would have performed in the past. Backtesting can be used to test a wide variety of trading systems, from simple trend-following systems to complex algorithmic trading …

Are Cryptocurrencies Good Diversifiers?

Cryptocurrencies are digital or virtual tokens that use cryptography to secure their transactions and control the creation of new units. 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 …

How High-Frequency Trading Impacts the Markets

High-frequency trading (HFT) is a type of algorithmic trading that uses computer programs to place orders at very fast speeds. High-frequency traders use sophisticated algorithms to analyze market data and make trades based on their predictions. These traders typically trade in large volumes of shares and use very short-term strategies. …

Another Look at the Effectiveness of Technical Analysis

Technical analysis is the study of past price patterns to identify market trends and predict future prices. Technical analysts believe that the collective actions of all participants in the market, including buyers and sellers, producers and consumers, investors and speculators, etc., ultimately determine market prices. Therefore, technical analysis focuses on …

How Monetary Uncertainty Affects Market Volatility

Monetary policy is the process by which a government, central bank, or monetary authority manages the money supply to achieve specific objectives. In most countries, these objectives are stabilization of prices and maintenance of low inflation. Monetary policy is also used to manage economic growth, employment, and exchange rates. Monetary …