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  • Parent Category: Articles

Find a strategy. Validate It. Do It. (Part 2)

Last week we looked at the BORD pattern traded on the S&P 500 ETF ($SPY). It offered an elegantly simple setup with reasonable results. As presented, this is known as a 'single market system' meaning it was designed and built to trade one market. However, single market systems tend to be based on random noise (found through data mining or optimization) rather than a specific edge. As such they ultimately fail; what was once a profitable pattern deteriorates to the point of becoming unprofitable.

We'll discuss this in more depth in a later newsletter, but for now we want to put the BORD pattern through a simple exercise to see if it does actually have any merit as a robust setup. If it does then it should be profitable across a larger universe of stocks and not just on the single ETF we've presented. To do so we'll test it across the entire S&P 500 universe including all delisted stocks to remove survivorship bias, using a maximum of 20 positions with 5% of capital allocated to each. The test also includes commissions.

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Commission Drag

A common oversight by new traders is taking into account the cost of actually trading. Like any business you need to assess all revenue and expenses to determine if you're on the road to riches or the road to ruin. Today we'll focus on one important expense. Here's a real time example.

Recently I received a call from a friend who was interested in purchasing a high end trading strategy. As he'd never traded before and large sums of money were involved he wanted me to take a closer look. I gave the vendor a call to get further information. In summary:

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  • Parent Category: Articles

How You Can Win In 2015 And Beyond

how you can winThere are big reasons to be excited for 2015. Lower interest rates, a lower Australian Dollar and the monster plunge in Oil are all extremely stock market positive and should lay a solid foundation for a good year ahead. Bring it on I say...

However, regardless of what I or anyone else thinks, the real key to success, what every professional trader knows and understands, is discussed in this brief video. If you really want to finish 2015 in a better place financially, then take 7-minutes now and watch this video...

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