Trading Psychology: A Checklist Approach

The S&P 500 made significant gains in the first days of 2011, yet many market analysts and traders are bearish. The reasons vary and include worries about earnings or the economy but many feel that the market is headed for a fall. These bearish pronouncements seem to be business as usual. Last summer many of … Read more

Testing Simple Strategies: MACD Works and Futures are Rewarding

Traders are fascinated by indicators. But just because something is interesting, logical or mystical does not mean it works in the market. Testing is needed to be sure the indicator adds value, and we will define value as improving profits. If an indicator beats a simple trend following strategy, it adds value. Over the years, … Read more

Indicators on Indicators: The Next Step in Analysis

Traders and analysts have been developing market indicators for decades. Many of these indicators are simply measuring the same idea in only a slightly different way since most indicators are based on the same limited amount of market information. For any given time frame, there are only four price data points – the open, close, … Read more

Seasonality: Do Stocks Really Go Up In January?

Many Wall Street pundits have been talking about the Santa Claus rally and the January Effect. In both cases, stocks are expected to go higher based upon a seasonal pattern. This is an appealing idea to trade because if there are reliable seasonal patterns then traders can boost their returns by taking more aggressive trades … Read more