Are you getting a comprehensive assessment of your strategy’s downside? This post will discuss several methods to measure drawdowns, helping you build and select strategies that better suit your risk appetite. Risk management is a cornerstone of successful…

Moving averages are among the most common technical indicators in the trading world. In general, they produce reliable entry signals in trending markets, but struggle during periods of consolidation. What if we could have a moving average that adapts to the market? Kaufman to the Rescue In 1972, legendary trader Perry Kaufman started developing the […]

Every day I come across a trading guru offering educational content on the internet. Many of them speak of huge returns with minimal effort. Should these be trusted? Here’s some tips on how to separate the wheat from the chaff. Like most people, I watch YouTube…

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 […]

They say the trend is your friend, but how do you find your friends in the forex jungle? This post shows you how to use the ADX indicator to identify forex markets and timeframes that trend well. The ADX algorithm explained below can be downloaded from the Free… The ability to efficiently trade a diversified […]

Pivot points provide a convenient method to identify intraday support and resistance levels. This post will first explain how pivot points are calculated and interpreted. I’ll then use them to program a simple mean reversion strategy for the EURCHF. You can… The Money Flow Index (MFI) is another momentum oscillator that MT4 provides by default. […]

It’s finally here! My first trading e-book, Trend Following Hacks, is now selling on Amazon! Tired of missing another market trend? Sick of reading “secrets” and “ultimate” guides that don’t deliver? This no-frills trend following guide slices through the marketing fluff and explains the tools and concepts you need to start beating the markets. In […]

I recently came across a trading meme: Jokes aside, it is well known that trading can be a rather stressful activity. If you’re trading using algorithms, you’ve already taken a leap towards becoming stress-free. You won’t have to spend long hours staring at your charts; neither will you face the risk of execution errors. Here’s […]

As if individual strategy development wasn’t difficult enough, you now need to figure out how to combine those strategies into a portfolio. Fortunately, using QuantAnalyzer, there is an easy way to do it. Looking to construct a diversified portfolio of trading strategies? Chances are you’ll need a strategy correlation matrix. Here’s how to get one! […]

A temporary trading pause can improve your win rate if you’re trend following a volatile market. Here I’ll program a trading pause into a simple breakout strategy, and test its effectiveness on the Widow Maker – the GBPJPY. If you’re a trend… Avoiding false breakouts is a common goal among trend traders. The Kaufman Efficiency […]

Traders are perpetually engaged in the search for better entry signals. With today’s backtesting software, we can quickly quantify an entry’s profitability over years of historical data. The Edge ratio, first proposed by Curtis Faith in Way of the Turtle, is a unique metric that can help with entry selection. The ratio is derived from […]

The forex markets are open 24 hours a day, but not all hours are created equal. Trading volumes are known to vary significantly throughout the day. But I’m not one to listen to anecdotes, so I decided to dissect my broker data and verify it for myself….

This has to be among the top 5 questions I’ve received over the years. Continual improvement is the name of the game, but to improve, you first need an objective way to measure performance. So as a retail trader, is there a professional benchmark, against which… The MACD is a simple and effective momentum indicator. […]

Understanding your backtest report is an essential part of being a successful strategy developer. Here I explain what the numbers mean, and how you can make use of each metric during strategy development. Every automated forex trader has combed through an MT4 backtest… In this third and final part of the MT4 strategy development guide, […]