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One of the common misconceptions about trading and investing is that the Sharpe ratio is not a reliable indicator of risk-adjusted returns because it punishes “good” volatility. There are many articles in the financial blogosphere and posts on financial social media ...

Markets are non-stationary, and the big picture constantly changes. Understanding the big picture is a daunting, if not impossible, task, yet this futile exercise is appealing to many traders and investors. Some analysts, traders, and investors often argue that understanding the ...

Besides bluffing, liquidity search, and irrational investment decisions, vague market forecasts present high risks for the unsophisticated crowds. Every day on the financial mainstream and social media, some experts or analysts make forecasts about the direction of capital markets. Some think ...

Market analysis has a poor track record owing to biases and complexity. Fundamentals have lost most of their predictive power due to interventions in the markets in the form of quantitative easing and deficit spending. Market analysis biases Due to its inherent ...

Investing in the META stock since 2022 has yielded a return comparable to an equal allocation to the seven magnificent stocks. This chart confirms that the average performance of the magnificent seven stocks has nearly matched the performance of the META ...

We include backtest results for eight strategies for traders and investors in various timeframes and markets. All strategies trade liquid ETFs, and the backtests include $0.01 per share in commissions and slippage. This is just a sample of the Price Action ...

Monkeys can throw darts at stock quote pages of newspapers. Is long-only momentum better than the monkeys? In his best-selling book A Random Walk Down Wall Street, Burton Malkiel claimed that a monkey wearing blinders and throwing darts at a newspaper’s ...

Passive investors in equities are trend followers who do not try to minimize drawdowns with tactical models. In the realm of investing, the majority of concepts are based on convention, much like in science. Objectivity about definitions and rules is more ...

Attempting to enhance outdated investing or trading strategies and ideas that have not yielded expected results is rarely successful due to data snooping. It is tempting—so tempting that even people who understand the dangers of data snooping cannot escape it. Data snooping ...

With the advent of portfolio backtesting software and platforms, in the last few years there has been a proliferation of equities momentum strategies with very attractive backtesting metrics. In this article, we focus on some of the issues and present ...