Blog

Knowledge

The Case for Systematic over Discretionary Trading Styles

"You need many trials to expose biases the same way Vegas needs many bets to exemplify the fact that their long-term edges are ultimately insurmountable". Art Collins in In Beating the Financial Futures Market (Wiley, 2006) makes a powerful case for systems trading over discretionary trading. The following thought provoking extract was posted by Brenda Jubin in… Continue reading The Case for Systematic over Discretionary Trading Styles

Blog

Why Backtesting is Important for Price Followers

Here's a question for you. If trend traders talk about following price rather than predicting it, then why do they  feel that backtests are important? Well, as counter-intuitive as it might seem, a trend follower does not backtest to estimate their future profitability but rather conducts backtests to determine risk management thresholds before stepping into… Continue reading Why Backtesting is Important for Price Followers

Blog

How Do I Assess whether my Strategies are Curve Fit or Not?

This is perhaps the most important consideration to assess in testing the long term performance of your strategies. It is very easy these days to generate wicked equity curves that ascend in a linear way to the stars....however fall off the cliff as soon as you take them to the live trading environment. What you… Continue reading How Do I Assess whether my Strategies are Curve Fit or Not?