Knowledge Centre

Entry Techniques

This week’s stock trading question comes from Mike R. who asks: “I’m testing out a very simple futures system. Essentially I’m looking for closes above or below a certain moving average. Initially I had the entry/exits as ‘on the following days open’. However I changed that to enter/exit on the close if said close is […]

Drawdown Diagnosis – what’s wrong with my trading?

Drawdown diagnosis – aren’t all drawdowns the same? After all, a loss is a loss, right? Wrong. Not all drawdowns are equal. A drawdown is a decline in your trading account or strategy. Handling a drawdown is one of the hardest thing for traders (alongside sticking with their strategy). Analysing Drawdown I came across a […]

Trading Psychology 101

It was recently suggested that I should write a book on trading psychology. Unfortunately I’m not the right guy. I have street smarts, including sitting on a couch for 6-months talking it through with a therapist, but I’m in no way qualified to write a book. I do see many issues each week that traders […]

Hedging Currencies When Trading US Markets

This stock trading question about hedging currencies comes from James B. who asks: “If you decide to trade US stocks how do you hedge your currency position (assuming your capital is originally AU domiciled)?” Great question. If you use a cash account then you will be exposed to currency exposure on both the full capital […]

How to Choose the Right Stop Loss

This stock trading question about how to choose the right stop loss comes from Samraj D. who asks: “I am from India, trading in Indian stock markets. Since fixed price stop loss is triggering very often, [can you suggest the] best stop for smaller time period: Donchian Channels Bill Williams * Fractals * Support / […]

Can I Run a Weekly System Daily?

Can I Run a Weekly System Daily? This stock trading question comes a reader who asks: “I run the RealTest Turnkey Code for Weekend Trend Trader each day so that I can get into the trades as they pop up and not once a week. Is this OK or is there a better way to […]

Deciding Which Signal to Take

This stock trading question in deciding which signal to take, comes from Said B. who asks: “When trading two strategies, one daily and the other weekly, on the same universe of stocks (Russell 3000)… From time to time they will give signals for the same stocks on both the strategies. Should I only buy on […]

Trading Software

This stock trading question about Trading Software comes from Kim-Sung J. who asks: “I have developed trading systems using Bullcharts and Tradesim. I have tested the systems on All Ords stocks. I’m aware there are survivorship bias which I don’t know how to account for. My feeling is that the survivorship bias could significantly affect […]

Paper Trading

“Do you recommend a paper trading account?” This stock trading question comes from James C. who asks: There are pros and cons for using a paper trading account. For: It allows us to assess how disciplined we really are when it comes to executing our strategy. It’s easy to look back and say, “I would […]

Turnover and Volume Filters

This stock trading question comes from Colin H. who asks: “In the two books of yours I’ve read you suggest the use of both turnover and volume filters. Whilst I like the idea I don’t have an empirical method for determining parameter values. For example, a turnover filter set to an average of $500,000 over […]