I haven't seen any evidence of these levels so I'm both wary and interested in this system. I don't see that your EA is trading at round numbers at all, so I don't really understand how it is making entries. Is this just because of spread/slippage? ...

Notable numbers strategy

Introduction Summa discovered the power of investor sentiment indicators while tracking daily put/call option volume during the bull run of the 1990s. Most followed and ‘most reliable’ is the CBOE equity-only put/call ratio. It began sending warning ...

The Finance Book Club

Trading Against the Crowd Profiting from Fear and Greed in Stock, Futures and Options Markets Preface Begins with a quote by our friend Robert J. Shiller about the efficient markets theory. “Price may appear to be too high or too low at times, but, ...

The Finance Book Club

image Rough seas ahead for HODLers.

Clemmo's Trading Odyssey

Appendices Appendix 1 and 2 are ‘mad scientist’ chapters where Unger goes through the motions of developing a strategy and adjusting it based on findings. He perfectly summarizes why chapters (and whole books) like this are of limited use to the ...

The Finance Book Club

Chapter 12 - Q&A This is a chapter consisting of theoretical questions with answers by Unger. Heavily edited for length. Q:Can we use the strategies? A: No, they’re too basic. Make something ‘more solid’. Whatever that means. Q: Does ‘risk’ = ...

The Finance Book Club

“Remember that rejecting a trade for this sort of reason is part of money management and shouldn’t be seen as something stupid.” You can Ignore the trade (simplest) Increase the risk (imprudent) Move the SL level so you wouldn’t lose more than $2k ...

The Finance Book Club

The general formula is image If Unger hits the target: image “Note that the percent volatility model doesn’t in fact consider the strategic levels of the trade you are going to open. The formula doesn’t consider the entry level (the number of ...

The Finance Book Club

Chapter 11 - Discretionary Trading Unger doesn’t want anyone to feel left out so we get this mega-chapter. After reading the previous chapter, you’ll probably think the money management techniques in it must be combined with a trading system. ...

The Finance Book Club

Chapter 9 - MM Trading Stocks Futures are not any riskier than Stocks once you know them. Risking more with stocks paradoxically can improve performance, because unlike with futures, the commission costs don’t necessarily increase with more volume. ...

The Finance Book Club

Chapter 8 - Combining Forces Use a combination of systems Unger introduces a new system - the Donchian Channel breakout It “is based on hourly bars, and simply buys on the breakout of the 50-bar high and sells on the breakout of the low in the same ...

The Finance Book Club

Chapter 7 - The Work Plan A strategy is no good without a plan because when under pressure (Mike Tyson’s punch to the mouth) you’ll worry and not know what to do image If you know the rules of your strategy (for example because you created it ...

The Finance Book Club

image “The Monte Carlo simulation can also make you take quite drastic decisions you might not have taken, based on data from the principal trading system alone. It’s very important to try and take a step back to analyse the results of the ...

The Finance Book Club

Chapter 6 - Monte Carlo Simulation Even with a good system, and capable money management, trading too aggressively for your account size can result in ruin. Being under-capitalized means you are trading with a very aggressive risk profile by ...

The Finance Book Club

Chapter 5 - Refining the Techniques Unger argues the choice of MM method is largely one that we should tailor to our trading personalities. However there are other ways to tailor methods to our temperaments. Reduced f Just start with %f of 10% until ...

The Finance Book Club

Chapter 4 - MM Models Fixed Fractional Method See Jones’ book Optimal f See Jones’ book (although he has a more complex formula for calculating optimal f - possibly straight out of Vince’s book?) image Where image As Unger admits, this is ...

The Finance Book Club

I hope this is real. What a madman! He took a 15% hit on his last 10 lot E/J trade and what does he do?! Opens another 10 lots! image I'm beginning to like this guy. He's swinging for the fences! No, I'm drunk. That's a closed trade. LOL. He's ...

Clemmo's Trading Odyssey

4 down days in a row. Friday's going to be a barn-burner no matter what happens.

Dow Jones

Chapter 3: A Banal Trading System A moving average crossover system with a fast/slow EMA. on M15, with $20 USD commission and slippage built in to each trade. image The system trades only from midnight to noon, in order to emphasize that a gap ...

The Finance Book Club

Chapter 1: Martingale and Anti-Martingale See Jones’ book. Chapter 2: The Kelly Formula See my notes on Emerenko, or the review of ‘Fortune’s Formula’. image This is how Unger describes the formula, where R = ratio of wins to losses. W = ...

The Finance Book Club