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Category Archives for Building Strategies

Dollar Stop Losses Vs. Volatility Stop Losses: Algorithmic Trading Tips

I remember when I first got into trading and algo trading. Everything was a mystery:     What kind of signals should I use for entry?     What kind of stop losses should I use?     What method of position sizing is best?The list went on and on. So much to learn!But for one of those […]

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Why Trading The Wrong Timeframe is Killing Your Trading Account

What timeframe should you trade?Here is a big hint: the smaller the timeframe, the more difficult it is to develop a successful system. In other words, developing a system to trade on a 5-minute chart is more difficult than developing a system that trades on a daily bar.There is a lot more noise on the […]

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The Ultimate Guide To Successful Algorithmic Trading

Pretty much everyone who has programmed a computer to doanything beyond outputting “Hello World” has dreamed of having a computer algorithm (algo) working tirelessly to extract money from the financial markets, be it in stocks, bitcoin, soybeans or anything else traded on an exchange.  “Programming genius, market slayer” is a phrase we’d all like to […]

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Do Stop Losses Always Work? (Can Stop Losses Fail?)

One of the most important aspects of trading is that of managing and preserving your capital. If you lose all of your trading capital, there is no way you can make back the lost amount, regardless of how profitable your strategy is.In order to protect themselves from outsize losing trades, many traders choose to use […]

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Why You Shouldn’t Use Python for Algorithmic Trading (And Easylanguage Instead)

When traders look into learning algorithmic trading, they have to choose not only a trading platform, but also a programming language. There are many options in the market, and while some use their own specific coding language platform, others use Python or C++.So why should you then not use Python in algorithmic trading? Well, the answer […]

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Intermarket State Analysis

For the past 20 years I’ve been teaching my concept of intermarket divergence. If you’re not familiar with intermarket divergence let me briefly explain this simple concept.Many markets are interrelated. These interrelationships can offer predictive capabilities for many markets. The study of these interrelationships is called intermarket analysis. A widely known intermarket relationship is the […]

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How To Build Profitable Trading Systems

Building a profitable trading system is very difficult. I’m not going to sugarcoat it. It’s a challenging project where most of your ideas will not work. To make matters worse, you’re bombarded with misleading advertising, confusing claims, and wrong information. Learning a computer language to build a system is excellent, but that’s NOT enough to […]

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3 Techniques to Avoid Consecutive Losing Trades

In my experience trading futures, I have found that most damaging losses are caused by taking consecutive losing trades, i.e. runs of losing trades or correlated loses. In this post, I share 2 simple methods and 1 advanced method to avoid consecutive losses which can be applied to your trading systems and discretionary trading.The first […]

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Opening Range Breakout Trading Strategy Design and Implementation

The goal of this research is to find various set-ups and exit strategies that could be used for trading the opening range breakouts. The time frames we will be looking at are 10-min, 15-min, and 30-min opening range breakouts. We will focus our attention on the very liquid futures markets, in particular we will analyze […]

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In-Sample and Out-Of-Sample Testing

I am frequently asked if I do out-of-sample testing. The short answer is not always, and when I do it is not how most people do the test. There are lots of considerations and pitfalls to avoid when doing out-of-sample testing. Out-of-sample testing is not the panacea it is made out to be. There are […]

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