Category: TRADING

When to Stop Trading a Strategy?

In trading, a drawdown is a peak-to-trough decline during a specific recorded period of time of an investment, portfolio, or fund. A drawdown is usually quoted as the percentage between the peak and the trough. For example, if an investment has grown from $100 to $150, and then fallen back …

A New Method for Forward Testing?

A trading system is a set of rules for deciding when and how to buy or sell assets. These systems can be used to trade stocks, bonds, commodities, or other assets. Trading systems can be manual or automated. Manual systems require the trader to interpret market conditions and make decisions …

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 …