Optuma BlogArticles of interest & reports on trading, technical analysis, money management, and all things Optuma.
As a trader do you find yourself sometimes looking at a price chart and wondering why a stock reversed at a specific level? Or possibly more often you may want to know where it will stop falling so you can buy it. If so, you are thinking about what the extreme is…“what is the farthest?”
When we don’t understand all the numbers that make up our test results, we may be forced to endure more small losses than we can survive. Or “Death by a thousand small losses”.
We’re told that there are three kinds of lies: lies, damned lies, and statistics. As I’ve been focused so heavily on Signal Testing throughout 2016, I’ve been learning more and more about average returns. I now realise that this statement should be “Lies, Damned Lies, and Average Returns”. In this post I explain why the humble average is such a dangerous number for system builders and investors.
As investors and traders, at times we are often our own worst enemy. Almost everyone, even the greats, will concede that investing can be an emotional rollercoaster. Many of these greats have also come to the understanding that containing emotions is critical to success.
Last week I wrote about the journey I took with the Dynamic Market Profile tool and how it showed some promise as a mean reverting strategy. I performed a number of “back tests” (getting the computer to run the simulation with a model portfolio), but could never get the consistent results I was seeing by observing charts.
Optex Bands is a new tool we created to measure potential extremes away from the “consensus” price. To explain the how and why of Optex Bands, we have to first take a journey through the evolution of this tool. In this post, we cover Market Profiles and POC’s.
In his day, Einstein made a revolutionary breakthrough in physics with his theory of relativity. It presented a new way of thinking, answering many questions the Newtonian Physics couldn’t.
Late last year I picked up an old copy of a book by Michael Gur called The Symmetry Wave Trading Method. Gur introduced the concept of using a series of swings based on ATRs. This was one of those “ah-ha” moments.
I’ve worked in the markets for nearly twenty years alongside the evolution of algorithmic trading. I witnessed the Darwinian paradigm shift it brought as those who didn’t evolve were picked off.
In the last blog, we measured bearish sentiment with the Short Interest Ratio. Another way this can be done is by using volatility indexes.
I read a great phrase this week – “Technical analysis is for-profit social psychology”. It’s certainly true that the underpinnings of the best technical indicators is investor psychology.
Last week, we delved into a longer-term moving average crossover signal on the S&P 500 that was brought to my attention. Here’s that ominous looking chart again below. At first glance it says, ”I smell a Bear!” — and no one wants to get mauled like the last two bear markets.