General Comments
I just wanted to take a few minutes here at the end of the week and share some things I'm working on. Some of these things you will see soon, and some not so soon! New book First, I announced a few weeks ago that I have begun
Volatility
A lot of the questions I get from people are about volatility--how to measure it, how to trade, and even, in a basic level, what it means. I recently added a section on volatility forecasting to the research I write for Waverly Advisors, and I thought it might be interesting
Psychology
Our culture has an interesting relationship with creativity. On one hand, we hold creative artists in high regard, but many people secretly laugh at the arts as a career choice. We know that sometimes the solution to an impasse requires some out of the box thinking, business schools offer courses
Psychology
Here's an interesting question on a controversial topic--trading psychology. Reader Rob sent me a note asking: Hi. I hope you can help me with a question. I am a developing trader and am having a friendly argument with some trading friends. One person says that trading psychology is
Market Math
I ran a quick study this morning to look at what happens to stock market volatility following large single day volatile events. Note that we are looking at market volatility here, not direction, because the directional message is simpler and clear: historically, large volatile events in stocks have come after
General Comments
This will be the last post in a short series in which we have looked at ways to quantify and to understand a trading edge. This series was motivated by a reader's question, so here's Anthony's question again: First, I was messing with the
Market Math
Yesterday I wrote a post that looked at asset returns and how to compound them. That post was in response to a reader's (Anthony's) question, and I want to continue answering more of the question today. Here's the question in its entirety, with the
Market Math
One of my readers, Anthony, sent me a good question about doing some statistical analysis on stock indexes. I think there are some important lessons here. Here's the question First, I was messing with the SPY up/down N-days and the returns N-days after. It was evident that
Psychology
As markets languish in the summer doldrums, Glenn comes back with a good philosophical question: Example: Every retail trader in my community is long oil.. The sentiment is overwhelming and no one is short... However all these traders where long oil for the past couple months and obviously they have
Psychology
I saw this interesting article from Bloomberg last week, with the almost-clickbait title of "Train your brain for trading (No, Really!)" I just happened to click on it, and found that it was actually an interesting perspective on some earlier research. When I wrote my book (which you
Market Math
It can difficult to dig into someone else's work and research. I wrote a post a few years ago about why using the slope of a moving average, moving average crosses, or trend indicators based on multiple moving averages might be a very bad idea. (Answer: because it
General Comments
I thought it might be useful, since most markets are about as exciting as drying paint right now, to take a few steps back and consider some basic tools that most technical traders use. Today, I'm drawing from an early draft of my book, and sharing a few