The Legend of the Holy Grail

We have only to follow the thread of the hero's path, and where we had thought to find an abomination, we shall find a god. And where we had thought to slay another, we shall slay ourselves. Where we had thought to travel outward, we will come to the center of our own existence. And where we had thought to be done, we will one be with all the world. Let me tell you a secret about the market. You can make big money by buying breakouts that go beyond a normal day's range of price movement. These...

Examples Of The Impact Of Position I Zing

I'm currently consulting for a company that is producing position-sizing software that will do all the models we recommend and much more. The software, called Athena has millions of possibilities for position sizing, so you can test almost anything. It works with Trade Station5 signals, and it has a few built-in systems. Let's use Athena to see how several position-sizing paradigms perform in a complex trading environment. In addition, since stock traders are the least likely people to consider...

Oscillators and Stochastics

Oscillators such as RSI, stochastics, Williams R, etc., are all designed to help people who are trying to pick tops and bottoms. In my opinion, this is a fool's game, and there is no evidence that entry signals based upon oscillators have a reliability much better than chance. In fact, in most cases there is no evidence that the market generally meets the assumptions that many oscillators are making. As a result, I've elected not to give a long discussion on something in which I have little...

Stock Market Setups

In this discussion of stock market setups, I have no intention of giving you an exhaustive collection of possible setups for use in the stock market. Instead, I think it's much more useful to examine three different approaches that make money in the market. Each method is quite different from the others. And by comparing the setups that are used in each, you'll get a much better understanding of them and be able to invent your own. If any of the systems interests you, I suggest that you study...

Entry or Market Timing

Avoiding mistakes makes people stupid and having to be right The basic purpose of entry signals, most people assume, is to improve your timing in the market and thus increase the reliability of your system. I would estimate that 95 percent or more of the people who attempt to design trading systems are simply trying to find a great entry signal. In fact, traders are always telling me about their short-term systems that have reliability rates of 60 percent or better. Yet in many cases they are...