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Category Archives for Building Strategies

Simulation: Beyond Backtesting

One problem with traditional backtesting is that it relies on the presupposition that there are repeating predictive patterns in the market. In fact, most trading methodologies rely on this assumption. And yet we know the disclaimer that past performance is not indicative of future results.And yet backtesting largely assumes that the future will be similar […]

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Implementing Finite State Machine Functionality with EasyLanguage

Last Trade Was a Loser Filter – To Use or Not To UsePremiseA major component of the Turtle algorithm was to skip the subsequent 20-day break out if the prior was a winner. I guess Dennis believed that the success/failure of a trade had an impact on the outcome of the subsequent trade. I have […]

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Measuring Success: Key Performance Metrics

When you see the performance of a trading system, how do you know it’s okay? How do you know it’s the right system for you?Many people look at the net profit assuming the more profit system must be the better system. This is often far from a good idea. When comparing trading systems during the […]

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15 Price Action Patterns That Work in 2020

 Most algo traders are always on the lookout for new ideas to test and evaluate. I’m no exception.How about 15 price patterns that might form the basis of a good trading strategy?Without further ado, here they are (along with some general warnings and tips about using them)… Pattern 1 – Directional Bars and Pullback Momentum General DescriptionThis […]

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Algorithmic Trading Tip – Building Risk Protection Into Your Trading

90% of traders out there build strategies the wrong way.  How do I know that?  It shows up in the statistics – most traders lose!When most traders build a strategy, they have one goal in mind – maximizing profits.  That’s not necessarily terrible all by itself – after all, you need profits to make it […]

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Equity Curve Trading

What is Equity Curve Trading?First, let’s start off by defining what an equity curve is. It can be simply described as the growth of capital over time. Below is an equity curve that shows how an account would have performed had it invested only one contract in the fourth Free Friday strategy.(given away on twitter […]

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The Overnight Edge

Take Profit Seasonality on Overnight Trading

In this article I’m going to highlight a trading edge that appears in many different instruments and markets including both the futures and equity markets. It’s an edge that has persisted for well over two decades. This edge is a long bias that occurs in the “overnight” session as defined by the U.S. markets. Traders […]

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The One Thing Before Building A Intraday Trading System

If you have been reading EasyLanguage Mastery for a while you’re probably familiar with how I develop trading systems. The very first step is to come up with a simple idea to act as the seed or core of your trading system. I call this your key concept. This key concept is a simple observation […]

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Improving Your Algo Trading By Using Monte Carlo Simulation and Probability Cones

Improving Your Algo Trading By Using Monte Carlo Simulation and Probability Cones

Using Statistical Techniques To Better Your Odds Of Trading SuccessMy introduction to the world of applying statistical tools to real world situations was not a good one. I was in charge of Quality Assurance for a medium size aerospace company. Although we extensively used Statistical Process Control (SPC) on the factory floor, we now decided […]

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Rebalance Strategies

This is a simple technique that can increase returns per dollar traded. This blog will show an example of a simple strategy to demonstrate the advantages of Rebalance strategies.The base strategy is quite simple and uses all built-in signals inside of Build Alpha:Entries:RSI2 crosses above 15 and 20Vix term structure is positive (front two months, […]

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