A stock market anomaly is a way to beat the market.
It’s a rate of return or investment strategy that seems to defy the efficient market hypothesis.
Today, most investors agree that markets are fairly efficient even if they don’t believe in the purest form of market efficiency.
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The Hikkake pattern is a simple price action or candlestick pattern that is used to find market turning points.
The pattern is essentially an inside day with a fake breakout and is originally credited to Daniel Chesler CMT. Read more »
This post contains a detailed guide for creating a mean reversion trading strategy.
You will learn what mean reversion is, how to trade it, 10 steps for building a system and a complete example of a mean reversion system.
Let’s get going!
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It’s about time I updated my list of best trading books so here is my selection of the 100 greatest trading and investing books of all time.
I’ve read (or at least partly read) a lot of these and I’ve tried to put them in some sort of order as well. Not an easy task but see what you think.
If you have any suggestions for other trading books, please leave them in the comments. You can never have too many book recommendations. Read more »
Amibroker is an excellent tool for back testing and can also be set up for automated trading with Interactive Brokers.
The basic infrastructure is to connect Amibroker to the Interactive Brokers Trader Workstation software using the Amibroker IBController plugin as a buffer. Read more »
Members of our research program at Marwood Research will know that I update the program with new trading strategies on a regular basis.
Last month was Vix Trio and this month I have included another new trading system (with source code) called VWAP Pilot. Read more »
Filling the gap is a popular strategy where you buy a stock when it gaps down in the morning and then wait for it to fill the gap.
Many bloggers have written about how good this strategy is. However, there usually isn’t much evidence to support those claims.
I test the strategy on 20 Nasdaq stocks between 2008-2018 and find mixed results after transaction costs. Read more »
Some intraday stock traders say that if they could choose only one technical indicator it would be the VWAP.
I find that VWAP is not necessarily a holy grail and traders disagree with the best way to use it. In the rest of this article, I test two very simple VWAP trading systems and present the results. Read more »
This week we have seen a mini crash in the stock market indexes and an implosion of several short volatility ETNs. Mood in the stock market has quickly turned from exuberance to fear while some investors are ready to ‘buy the dip’.
Conventional wisdom suggests that the best time to buy stocks is when there is blood on the streets. Many suggest that high Vix readings are a good indicator to increase exposure to the market. Read more »
It’s no secret that financial markets are getting more and more efficient and therefore more difficult for the average trader. So it’s a good idea to think creatively and consider what might lead to an edge today or in the future. If you don’t have an edge you can’t make money.
Here are 10 new ideas to develop a trading edge in today’s markets: Read more »