The Sortino ratio is a way to measure the risk adjusted return of an asset, investment portfolio, or trading strategy. The Sortino ratio is an adjustment to the Sharpe Ratio that filters volatility from upside moves from downside moves. The Sortino ratio only measures downside moves that are below a specified volatility target or return […]
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A Monte Carlo simulation is a process used to show all the potential outcomes of a trading system, business model, supply chain, scientific theory, insurance, research and development, or a casino. A Monte Carlo simulation uses the most important available metrics of a system including inputs of size of wins and losses along with win
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The Sharpe Ratio was developed it in 1966 by William F. Sharpe as a way to quantify potential risk in an individual investment or an investing method or trading strategy. The Sharpe Ratio is the defined difference of the returns between an investment and the potential risk free return that is then divided by the standard deviation/volatility of the
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Inside probability theory, conditional probability is a way to calculate and measure the probability of some event happening if another event has already occurred. The Bayes’ Theorem is one way of calculating a probability of something occurring when you know probabilities of other things happening. The Bayes’ theorem is a mathematical formula that explains how to
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This is a Guest Post by: Colibri Trader @priceinaction As traders begin the journey, they will be hit with a multitude of different trading strategies, mantras, and methodologies. However, there are some things that do tend to hold true regardless of the trader or system, and multiple time frame analysis is most certainly one of them.
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Here are five steps that will help you become a better trader by taking you through the most important steps in your learning curve if you are early in your journey. As a new trader, you must have realistic expectations about your risk tolerance and return goals. What type of return are you trying to
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This is a Guest Post by Miad Kasravi @ZFXtrading of speculatorstrading.com. If you ever decided to task a robot to complete a rule based action, it is as easy as providing it with the formula; A+B=C. It’s straightforward and your creation will work flawlessly every time. When it comes to tasking human beings however, it’s remarkably different. For us
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This is a Guest Post by Sam McCallum at HoneyStocks.com. We all understand the Stock Market can either reward us massively, or have us huddled in a corner crying like a 2yr old… it’s both a magical place full of reward, but it’s also Mordor with Gollum lurking around the corner… yet somehow, we’re all
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This is a video guest post by AK of Fallible. Stanley Druckenmiller is one of the greatest hedge fund managers to ever live. In this interview we’re going to get access to his mind and expertise. Druckenmiller shares with us some of his best pieces of advice. Learn To Trade Stocks With The Advice Of
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This blog post is an excerpt from my book New Trader, Rich Trader. “The funny thing is that the principles you have been teaching me for trading success have also been helping me in other areas of my life. I think much more clearly about many parts of my life now. My journal has expanded
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