"Trading Model" Posts
Sharpe Ratio and Sortino Ratio Calculator for Day Trading Strategies
By Lawrence
After I explained in the article, How to Calculate Sharpe Ratio and Sortino Ratio Correctly on Day Trading Strategies, many readers have asked for example on how to calculate the Sharpe Ratio themselves given that all platforms are not reporting the correct values when developing day trading strategies without position sizing. So here it is, […]
Why Do Laurence Connors Market Breadth Trading Strategies Stopped Working?
By Lawrence
The interest of using market breadth to time the markets can be attributed to one person, Laurence Connors, thanks to his influence book Investment Secrets of a Hedge Fund Manager. The book was published back in year 1995. The strategies explained in the book are revolutionary because they are all complete mechanical trading strategies that […]
What We Can Learn from a Simple Yet Robust Mechanical VIX Based Swing Trading Strategy
By Lawrence
Many traders love to know how to utilize various market breadth statistics to improve their trading. However, majority of the narratives out there are all guess work based on visual inspection and speculation on how a market breadth statistics can be interpreted. Unless you have in-depth knowledge about market breadth, it is difficult to tell […]
Defensive Money Management Explained: Better Position Sizing
By Lawrence
Traders, discretionary and mechanical alike, are often puzzled on how to properly scale their trading with respect to their trading account size. Classic rule of 1% or 2% risk of investment capital just does not work because traders are here to take risk, not trying to be conservative investors. So, what can a trader do […]
Defensive Money Management Explained: How to Evaluate a Trading Strategy (or Your Edge) Objectively
By Lawrence
One of the fundamental questions that we have to ask ourselves when we see a profitable trading strategy is that whether the strategy will reform well in the future. All kinds of testing are invented from walk-forward testing to Monte Carlo simulation for the sake of giving us an idea how good (or bad) the […]
What’s Next for the Site,Money Management Requests and How am I Doing
By Lawrence
To answer a number of questions all along similar line of thoughts, here are my answers. My current spam to actual email ratio is about 15 to 1. My spam filter could only catch 50% of the spam mail. The actual number of emails that I need to response to personally is now about 50 […]
From Flying Fighter Jet to Trading as Life Long Career
By Lawrence
I have been exchanging email with Ron, an old friend from Netherland, lately and here is a short story of his path to establish his trading career. Ron was part of the Dutch Air Force. Since then his career had been revolving around airplanes until he tried his hands on silver and gold contracts. That […]
Intraday Bias: Emini S&P R1 Reversal
By Lawrence
Morning Reversal from R1 is a short only trading system that works on Emini S&P RTH 5-min timeframe. It is simple and has been working consistently for well more than 10 years. You can read about the basic concept behind from my article, Emini Day Trading: Understanding R1 Resistance. This example trading system shows how […]
Emanuel Derman: There’s Enough Math in Finance Already. What’s Missing is Imagination.
By Lawrence
Mr. Derman delivers a good point in this short video without using math jargons. All these mathematics being used nowadays by the financial institutions are really glamorous excuses to either get clients to deploy their money so that the financial institutions can make money from the transactions, or, to place bets hoping the counter-parties are […]
The Real Secret of Trend in Day Trading: Finding the Point of No Return
By Lawrence
We often hear traders talking about trend – trend is your friend, do not fight the trend, etc. Yet we seldom hear a room full of traders agree upon what the current trend is. This casual observation leads many people to believe price based analysis (I hate the term technical analysis) is not really that […]
