Are You Ready to Build An Automated Trading System? Here’s How

Automation is at the heart of technological innovation. Automatic transmissions Automatic coffee makers Automatic soap dispensers … You get the idea In trading, automation is what allows you to become ultra-efficient, find your best opportunities, scale up with more trades, control risk with less emotion, and become more consistent. As a trader, you already take advantage of automation in today’s markets. … Read More

Implied Volatility Filtering (SMBU Daily Video)

In our SMBU Daily Video, learn more about filtering implied volatility. In this video from Andrew Falde, you will learn: How to use the implied volatility indicator How to determine a stocks implied volatility What a low or high implied volatility indicates How to identify better trading setups using implied volatility Enjoy the video! *no relevant positions

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

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

The Effect of Computer Programs on Short Term Trading

One of our readers asked a great question recently in response to our blog posts. Our reader, Sandor, pointed out that we have the tendency to write about the computer programs that populate most active stocks in the market. But we haven’t really explained fully what they do or their impact on us short term traders. So I want to … Read More