A simple algorithm to detect complex chart patterns

Finding complex chart patterns has never been an easy task. This article will give you a simple indicator for complex chart pattern recognition. You will have the freedom to detect any pattern with any pattern length. Not just 2-bar candlestick formations, but complex stuff like V-Tops spread over 20 bars.

Defining a chart pattern

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The Probability of Normality

As an option seller you want the market to stay within the range prognosticated by implied volatility. But what is the historic probability that markets behave as expected? And what other analysis could be done to enhance your chances and find the periods when it is wise to sell an at the money straddle? This article will try to give some answers to this question.

The normal distribution cone

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The Edge of Technical Indicators

Classical technical indicators like RSI and Stochastic are commonly used to build algorithmic trading strategies.  But do these indicators really give you an edge in your market? Are they able to define the times when you want to be invested? This article will show you a way to quantify and compare the edge of technical indicators. Knowing the edge of the indicator makes it an easy task to select the right indicator for your market. Continue reading

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Daily Extremes – Significance of time

Analysing at which time daily market extremes are established shows the significance of the first and last hours of market action. See how different markets show different behaviour and see what can be learned from this analysis.

Probability of Extremes

A day of trading usually starts with a lot of fantasies for the future, then we try to survive the day and end it with a lot of hope for tomorrow. This psychological pattern can also be shown when analysing intraday market data. A high level of fantasies usually leads to a strong market movement, and thus market extremes can often be seen near the beginning or the end of the trading session. Continue reading

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S&P500 – when to be invested

The stock market shows some astonishingly stable date based patterns. Using a performance heat map of the S&P500 index, these patterns are easily found.

Date based performance

The chart below shows the profit factor of a long only strategy investing in the S&P500. Green is good, red is bad. The strategy is strictly date based. It always buys and sells on specific days of the month. Continue reading

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Noisy Data strategy testing

Algorithmic trading adds noise to the markets we have known. So why not add some noise to your historic market data? This way you can check if your algorithmic trading strategies are fit for the future. Learn how to generate noisy data and how to test your strategies for stability in a noisy market.

Synthetic market data?

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Factor investing in portfolio management

Factor investing has been around in portfolio management for some years. Based on algorithmic rules it became the big thing in trading and the ETF industry. But is there still some money to be made? Is small beta still smart or just beta? This article will give you a Tradesignal framework to test the factor investing ideas by your own. Continue reading

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