The General Principles of a Percent Risk Model When trading in futures markets, assessing and managing risks is the key to success. One of the prominent risk management models traders use is the Percent Risk Model. In this blog post, we will explore the Percent Risk Model, how it functions, and how you can apply [...]
Top Ten Trading System Evaluation Metrics Successful trading requires an effective and consistent trading strategy. However, developing this winning formula can only be challenging with adequately measuring and evaluating your system's performance. Understanding which metrics to utilize when examining your trading system is vital to optimizing your trading approach continually. This post will delve into [...]
Systematic Advantage #34: Systems Cannot Be Deceived A major benefit of systematic trading lies in its deception immunity. Unlike human traders, whose cognitive biases or misleading indicators can easily sway, systematic trading systems are insulated from such deceptions. This is thanks to their strict adherence to an empirically-verified set of rules and algorithms, ensuring that [...]
Irrational Exuberance: A Term that Defined an Era The term "irrational exuberance" has been ingrained in the financial world since it was first coined by Alan Greenspan, former chairman of the Federal Reserve, in 1996. This phrase is a stark reminder of the potential pitfalls of market speculation and the role of emotions in economic [...]
The "Performance Metrics 101" blog series is geared towards providing traders with the essential evaluation tools they need to assess trading performance accurately. The goal is to provide a complete understanding of these tools, enabling traders to use them effectively. Risk of Ruin in Action Financial markets can be a rollercoaster ride, and it's natural [...]
The “Trader's Mindset” micro-blog is the perfect source of inspiration to help you stay focused, determined, and motivated on your trading journey. Escaping Confirmation Bias to Discover High-Potential Trades Traders driven by the desire to uncover the next big trade face a risk of making less-than-ideal decisions. This is because confirmation biases tend to sway [...]
Irrational Exuberance by Robert J. Shiller Messaging and Thesis: In "Irrational Exuberance," economist and Yale professor Robert J. Shiller explores the psychological factors that drive market bubbles, explicitly focusing on the dramatic fluctuations in the US and housing markets. Shiller's main argument is that these bubbles inflate and burst due to various human behaviors, emotions, [...]
The History Behind the Japan Rice Exchange: Exploring the Origins of Modern-Day Futures Trading In finance, futures trading has a long and fascinating history. One of the most prominent early examples is the Dojima Rice Exchange in Japan, which was created in the 18th century and can be viewed as a precursor to modern-day futures [...]
Federal Reserve External Communication Blackout The Federal Reserve, as the United States central bank, directly affects the financial markets, investors, and the global economy. Throughout the year, the Fed communicates its economic outlook, policy stance, and decisions to the public through various channels, such as press releases, press conferences, speeches, and testimonies. However, there is [...]
Systematic Advantage #33: Systems Can Be Easily Evaluated to Reveal Points of Weakness Systematic trading gives traders the distinct advantage of evaluating their strategies systematically. Unlike discretionary trading, which can be affected by personal opinions and emotional decisions, systematic trading relies on clear and quantifiable rules and parameters that make it easy for traders to [...]
