The concept of trend following is based on the belief that security prices move in upwards or downward trends over time and that the surest way to profit from those moves is to attempt to ride those trends.

Despite some claims that trend following is a strategy for nonconformists, trend following is in fact hugely popular, particularly among retail investors. Read more »


Several months ago I was thinking about candlestick charts and whether or not these classic patterns had any predictive ability for trading. I had a look around but all I could find were vague speculations and cliches. I couldn’t find any solid evidence of whether they actually worked or not.

So… I thought I would casually test out a few candlestick price patterns and see if any of them actually worked.

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Last Friday the S&P 500 formed a shooting star candlestick pattern on the daily chart. This is a Japanese candlestick formation that is normally a bearish reversal signal. Sure enough, the S&P 500 moved lower the next day, dropping around 15 points. We saw this happen last September too. But how often does this bearish pattern really play out?  Read more »