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As the number of markets increases, the Sharpe ratio of profitable trend-following strategies tends to increase due to decreasing volatility. Trading in many markets is essentially a Sharpe maximization strategy. Some trend-followers argue that trading many markets allows them to catch ...

Portfolio diversification aims to reduce the risk of investing in any particular asset. Trend-following aims to profit from outlier trades. If a trend-follower knew beforehand which markets would generate outliers, they would also know what to only trade. Since knowledge of ...

A trade outcome distribution with a positive skew could be the result of a naïve application of a stop-loss without any regard to the underlying price action dynamics. Naïve trading strategies worked well in the 1980s and 1990s before the advent ...

Chasing outlier trades in markets is quite appealing in theory but painful in reality, despite having gained traction in the last few years due to a rebound in trend-following CTA performance. Chasing outlier trades in markets involves taking small losses until ...

Below is a  brief account of what you can do with the two versions of DLPAL. The article was updated on August 10, 2023. Deep Learning Price Action Lab™ (DLPAL) is based on a proprietary algorithm that produces the same output ...

In trading or investing, reliance on a single strategy may result in extended periods of lackluster performance or, worse, underperformance. Traders and investors require the flexibility provided by a diverse portfolio of strategies. Buy and hold investing in the S&P 500 ...

Strategies fail when market regimes change. I include in this article an example of a popular trading strategy for trading NASDAQ-100 stocks with excellent backtest performance for 26 years before crashing. Trading NASDAQ-100 stocks with monthly rebalancing was a popular strategy ...

The DLPAL software bundle offer will end on August 15, 2023. With this offer, you can try all three versions of DLPAL for nine months to determine whether they suit your trading needs and objectives. This offer is valid for ...

There was an analysis of a rival of DBMF ETF in this blog on March 2, 2019, and before the inception of the managed futures replication ETF. In this article, we compare the performance of the two ETFs and also ...

The Sharpe ratio is probably the most important metric for evaluating trading strategy performance. This article is based on a recent X (Twitter) thread by this author. I noticed in the replies that some questioned the use of the Sharpe ratio ...