Adaptive Trading Robots
Information technologies are expanding exponentially. Artificial intelligence marks significant progress in the last few years. Researchers now have more sophisticated tools for analyzing data sets and make accurate forecasts. Trading robots become more and more sophisticated and their performance increases. Automated robots already outperform the human trading in several ways: robots monitor the market 24
The Only Trading Strategy That Works
There are thousands and maybe millions papers, books, articles related to trading the financial markets. Known and unknown authors publish for free or sell all kind of trading strategies, manuals, technical analysis guides, advanced trading models, complicated mathematical algorithms with the purpose to make profit by trading financial instruments. The fundamental truth about trading is
Support/Resistance Using Price Frequency Analysis
In this post a simple price frequency analysis technique will be revealed and utilized to display support and resistance zones. The concept of support/resistance is commonly used in technical analysis and is usually represented as levels that act as price barriers. Price usually bounces back from these support/resistance lines or if overcome a strong price
Review of Some Betting Strategies Applied in Trading
Today will review and compare some betting strategies commonly used in Forex trading as well. It’s important to note in the beginning that these strategies are used when there are two possible outcomes with equal probability of occurrence. Although this is not an absolute requirement, that is most often the case. For sake of simplicity we will
What are your odds to win on Forex?
From mathematical perspective the financial price movements are considered to be a random walk. The price depends on so many factors that it becomes impossible to forecast. The random walk price movement is often explained using a coin flip to determine the next day price. If the result is heads the price goes up, if the result
Neural Networks (Part 1)
Artificial neural networks are mathematical models inspired by the biological structure of the brain. They are used to approximate complex unknown functions which depend on many input parameters. They have the ability to learn from examples and gather experience over time. Neural networks are gaining popularity and are already used in various areas like: function
What’s Next?
Hello, Appologies for not being quite active recently, it is due to lack of time. Most of my time is spent in software development and the posts get delayed. There are some other topics I’d like to share and discuss with readers. The next one I plan to do is about neural networks. When artificial
Pair Trading (Continued)
In this post we will discuss some other basic aspects of pair trading. As we have already discussed, correlation is usually utilized in pair trading. However, it is not enough for the two instruments to be just highly correlated. It’s believed that they should be aslo cointegrated. Cointegration is a statistical property of two or
The Power of Bolling Bands
Bollinger Bands is one of the commonly used technical indicators. It is also one of our favorite indicators because of its properties. It was introduced by John Bollinger back in the 1980s. Its purpose is to define how high or low the price is, compared to the previous periods. Bollinger Bands consists of three lines:
Pair Trading Basics
Pair trading is a market neutral trading strategy. It involves trading on highly correlated instruments. For detailed explanation on correlation please refer to our previous post. The idea of pair trading is to wait for periods of weak correlation between the two highly correlated pairs/instruments, going long on one of the symbols and short on