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Algorithmic Trading: Making Money with Math

What determines the market's next move? It is the combination of each action of every market participant. Some buy, some sell, others do nothing. Market prices reflect the sum of everyone's decisions. We can't observe what everyone is thinking. For this reason, we can't design a trading strategy with this starting point. Too many variables are involved.

We can observe prices. But if we simply analyze prices, most movements appear random. Nevertheless, predictable patterns are there. We just need to find them.

That's where Algorithmic Trading comes in. Apply statistics to filter out the randomness and find the patterns. An algorithm is a set of instructions or rules that are backtested to create a system to trade the markets.

The Truth about Trading Success

Contrary to popular opinion, discipline alone does not lead to trading success. Instead, the best predictor of success is a profitable trading strategy... Read More

Making Money with Math

How to apply statistics to create successful trading strategies... Read More

A Trading Epiphany

Asad Dossani discusses a trading epiphany he had years ago. This led him down the path of system trading... Read More

Sixty Percent

Asad Dossani discusses why success rates in trading are around 60%, and no higher than that... Read More

When Backtesting isn't enough

Asad Dossani discusses when backtesting isn't enough. A major problem with backtesting is over-fitting, whereby we find strategies that work on historical data due to chance alone. Unfortunately, the same strategy is unlikely to work in a live market... Read More

Flash Boys

Asad Dossani discusses Michael Lewis' latest book, Flash Boys. It is a story about high frequency trading, and the investors that set out to make things right... Read More

The Social Value of High Frequency Trading

Asad Dossani discusses the social value of High Frequency Trading (HFT). HFT has been shown to reduce trading costs, but also increase market instability. The biggest losers are market makers and very short term traders. Governments are likely to further regulate HFT in the near future... Read More

Stay Away from Crowded Markets

Asad Dossani discusses why you should stay away from crowded markets. The more crowded a market is, the more difficult it is to make money due to increased competition. Low and medium volume markets provide the best trading opportunities... Read More

The Secret to a Successful Trading Strategy

Asad Dossani discusses the secret to a successful trading strategy. The secret is that coming up with ideas is actually fairly simple. The hard part is turning these ideas into successful trading strategies... Read More

How to Use the Past to Predict the Future

Asad Dossani discusses how to use the past to predict the future. We do this by testing our trading strategies on historical data to see how they would perform... Read More

What are Algorithmic Trading Strategies?

Asad Dossani reveals his secret approach to short term profit, Algorithmic Trading Strategies. A simple set of rules used to predict market movements... Read More

 

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