This blog post is based on a presentation delivered at the Australian Technical Analysts Association Annual Conference. The video presentation is available below and the blog post that follows is a text version of the video presentation.Introduction to Trading Profitably In An Uncertain World Would you like to make money more consistently, no matter what the market or economy is doing? I want...
Relative Strength Index (RSI) IntroductionRSI is short for Relative Strength Index. It is a trading indicator used in technical analysis (a Momentum Oscillator) that measures the magnitude of recent price moves to determine whether overbought or oversold conditions are present in the price of a stock. The RSI is typically measured on a scale of 0 to 100, with the default overbought and oversold...
Introduction to Technical Analysis BasicsTechnical analysis is an approach to analyzing stocks that uses charts and indicators based on price and volume. Traders can make profitable trading decisions using technical analysis indicators and chart patterns. I have been using trading systems based on technical analysis and technical indicators for over 20 years and have had very significant success...
Introduction Moving Averages What is a moving average and what is it used for? A moving average is a trading indicator that used on your charts and in your trading systems to help gauge the direction of the price movements. Moving averages are one of the most commonly used indicators in technical analysis, systematic trading and algo trading. This is because they perform several useful functions...
In Amibroker when you are generating your trading signals from the backtest there is one important setting that you need to use most of the time. If you get this wrong then your Amibroker trading signals will be wrong... so when should you use the 'Add Artificial Future Bar' setting in Amibroker? When your system gets a signal today and enters tomorrow, it's a one day delay between the signal...
Slippage is one of those silent profit-killers that most traders underestimate—until it starts eating into their results. In simple terms, slippage is the difference between the price you expect to get and the price you actually receive when buying or selling a stock. It can happen for many reasons: market volatility, low liquidity, or your own order size being too large relative to the market...
The key lesson is to make sure that you follow the calculations all the way through yourself manually so that you understand what the conversion should be and make sure that your position size is appropriate relative to your base currency account. For example, you can get yourself into trouble. If my base currency was Australia and I have a system on the US. If I don't set it up right, I might...
Trading requires a deep fascination with the markets, strong work ethic and persistence. Traders are also human and experience emotions - we go through ups and downs in our trading journey. And with these constant challenges, our motivation can fluctuate. It can be hard to keep up trading motivation, particularly when you’ve had a bad trade or feel that you are not advancing as quickly as you’d...
The most important thing is not exactly what you do, that it's you understand what you are doing. The implications of it, because there's different ways to configure this. You could have in Amibroker, your base currency is Euro and you could run your systems, which are trading US dollar stocks, and Amibroker will do the calculations and size everything back so that it's in your base currency....
Let's say you have US dollars in your account and buy something against Bitcoin. You buy Bitcoin, and then you use the Bitcoin to buy Ethereum. Thus, you are trading the movement of Bitcoin versus Ethereum, And when that trade is finished, you close it, you're left with Bitcoin. If you don't convert the Bitcoin back to dollars, you have currency risk on the Bitcoin. My approach is if I'm trading...
With Interactive Brokers, if you have a margin account and your base currency is Australian dollars like mine, and I want to buy US dollar stocks. The way it works in Interactive Brokers is I want to buy US dollar stocks, I've got Australian dollars in my account, but it's a margin account. I don't have to convert my Australian dollars to US dollars and then you use the US dollars to buy US...
It would be better to trade what you test and test what you trade. Thus, if you could find a way to match your backtest with your execution or to match your execution with your backtest, that would be a better solution, and there's two ways to do that. The first way is to automate so that it can run when you're asleep, and it'll just happen, that way there's no slippage because what you're...