Many years ago, a stock broker told me, “When the US market sneezes, the world catches a cold.” That still rings true today. If you trade anything at all, chances are you’ll have to pay attention to the US economic reports, and few can trump the…
Bollinger Bands Free Bar Trading Strategy – TradingTact
Bollinger Bands are the gift that just keep giving. They’re simple and easily applicable to both trend following and countertrend strategies. Here I’ll introduce yet another way to use Bollinger Bands to fade temporary overextensions. Bollinger Bands in a Nutshell Bollinger Bands consist of a simple moving average, with a pair of bands plotted at […]
Walk-forward Optimization – TradingTact
We begin the next phase of our robustness testing workflow with the reduced basket of 56 GBPJPY strategies generated using StrategyQuant’s genetic algorithm. These 56 strategies managed to remain profitable when tested over an additional 5 forex markets. We will continue to shortlist robust strategies by conducting another difficult out-of-sample (OOS) test, in the form […]
Trade Slippage: How Can You Simulate and Minimize It? – TradingTact
Every trader has complained about slippage at some point. Like spread and commissions, it is sometimes an unavoidable cost of trading. Nonetheless, minimizing slippage should be a goal of every trader. In addition, can we improve our backtest realism by simulating slippage? Let’s discuss! What’s Slippage, and Why Does It Happen? Slippage is the difference […]
Using Maximum Adverse Excursion for Stop Loss Placement – TradingTact
In the diverse world of strategy development, there are often multiple approaches to the same problem. Traditional parameter optimization is often used to determine your strategy’s stop loss placement. Here I’ll demonstrate a more visual method using the concept of maximum adverse excursion, and compare the results from both methods. What is Maximum Adverse Excursion? […]