Rick Martin, lead developer of SMB Systems Trading LLC, will be discussing system trading tools to use in your trading – what they are, how to know if they will work and if you have what it takes to add a computer to your trading and tune them to fit your trading style. Questions from attendees will be answered at … Read More
How To Lose All Your Money
We have one more major thing to look at as we build out our casino—volatility. We know the house edge for every game, but we also need to know some basic statistics before we open the doors of our casino. Let’s just focus on standard deviations for this discussion and how they affect our returns, and the bettor’s returns. Game … Read More
A Few Spins Of The Wheel Redux
We made a fundamental error in calculating the returns in our last article, and many thanks to one of our readers who was on his toes and caught it. Some of our calculations were based on dollars per trade and others on dollars per share—clearly a case of pineapples and pomegranates, along with doing the calculations much too late at … Read More
A Few Spins Of The Wheel
Last week we talked about the casino’s edge which in the trading world is called expectancy, but all that expectancy tells us is whether or not our trading strategy is likely to be profitable or not—but not how much money we might make. How profitable depends on how often we have a chance to trade our system—will it be a … Read More
Great Expectations
The next step in building our casino so that we have the house odds in our favor is to look at the edge, or in system trading terms, expectancy. Let’s take a look at the house edge in a few casino games: Game House Edge Baccarat 1.2% Blackjack 0.8% Craps 1.6% Roulette 5.3% So exactly what does this mean? Let’s … Read More
Less Is More–Usually
Less is more—most of the time. In my early days, I started out with almost twenty different indicators in a single system—and why not; the computer was going to do all the work. I figured that if I combined enough techniques, I could find the perfect entry signals—I hadn’t even thought about the importance of exits back then. Well, needless … Read More
There Is No Holy Grail In Trading
I wanted to respond to a couple of observations from our readers: The first: “If you’re talking a pure technical (trend-following or countertrend based on indicators) system on highly liquid vehicles like QQQ, “getting a real world system to work” is insanely difficult….I’m looking forward to this series, skeptical though I am.” And the second: “It’s simple enough to create … Read More
Sometimes It Pays To Be Boring
What if I told you it was possible to be up over 30% year to date trading just QQQ about once every other day. Sound boring? And the only thing you had to do was to turn on your computer—well, not the only thing—and that you would have to have a thoroughly tested trading system first. And if you did, … Read More