The trading system presented in Formula 301 #3 is a moving average based trading system that works year after year.
Before we have access to intraday day data, how do we test trading systems that last only a day?
Long time ago, thats all we have access to, and I think it is a good idea for our readers to see how traders utilize classic bias without the help of intraday data in creating day trading systems.
I and Louis have written an article called Advance Issues Momentum published in the Technical Analysis of Stocks and Commodities magazine, August 2004 issue. Here is an update about this interesting indicator.
OddBall is created by Mark Brown, and was featured in Active Trader magazine. It is a trading system designed for trading the S&P index future (or the emini counterpart). The signal generation of Oddball does not depend on the price data itself. Instead, it is based on the Advance Issues data from NYSE. We originally posted this system’s implementation in NeoTicker and its performance back in 2003.
Here is an update of the current performance of this interesting system.
Many beginners in trading system development like to play with position sizing scheme. It feels great when you get a great equity curve with spectacular performance by simply twisting what position sizing rules to use and experiment with various sizing parameter settings. I have some bad news for you – such system will not likely perform in real life.
Back in August 2003, I have an article called Daytrading The E-mini published in the Technical Analysis of Stocks & Commodities magazine. It described a technique called Data Reduction that improves certain type of indicator performance drastically. The technique is applied onto a basic trading system that works very well at that point in time. We are going to take a look at the system today to see if it is still performing as expected.
Trading for a living requires a lot of discipline. It also requires a lot of streets smart if you trade discretionarily. One thing that many beginners missed is a basic concept of having multiple setups learned and practiced correctly.
Some readers are very forthcoming, they simply email me and complained to me for wasting their time in talking about moving average as something that is useful at all. I replied through email asking for their patience and wrapped up this third instalment as soon as I can.
Moving average based trading systems still exist and work very well still, even today. Here is a basic scalping setup based on average range channel, which in turn is based on simple moving average, that works very well for many years.
After demonstating a pure daytrading short signals in Advance Issues Pattern 1, we are going to look at the data to see if we can figure out a daytrading pattern that works from the long side. Since year 2000, the S&P 500 is in a major downtrend, is it possible that there exists long side pattern that can make money?
NeoBreadth enables our users to collect user defined breadth data within NeoTicker, both in real-time and in reconstruction of historical breadth data. The analysis of customized market breadth data is not a common topic in technical analysis as NeoTicker is the only platform that can do that properly. How useful are customized breadth data? How do we utilize these information?
I’ll present a simple trading system based on advance issues of S&P500 as our first example on how to tap into the power of complex breadth analysis.