Category: Trading
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Checklist Alchemy: Turning Trading Errors into Assets
Recently I was helping my eight year-old with her math homework. An impatient young lady, she tends to calculate in her head instead of showing her work. I am trying to impress on her that this habit increases her likelihood of error and will wind up costing her time and more. I have learned…
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Implementation Shortfall with the 200-day SMA Timing Strategy
Yesterday’s post examined the results of following the 200-day SMA rule seemed to work on daily values of the Russell 1000 and 2000. The data showed that a 1-day delay in trading would have benefited the Russell 1000 timer, but hurt the Russell 2000 timer. Today’s post looks at the cost of simply delaying until…
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Strategy implementation: Investing discipline or investing habit?
Over the past 20 years I have spent much time meeting, researching, interviewing, and otherwise picking the brains of traders and investment managers. Most of them could talk your ear off about their discipline and the rationale supporting it. Ultimately, any investing or trading discipline requires that you recognize your edge and execute your strategy…
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Why it’s so easy to loathe high frequency traders: you can see them profit
This morning Tyler Cowen wrote again about High Frequency Trading. His post has to do with the idea that our economic intuition breaks down at small scales. I don’t think small scale is the matter; I think transparency is. Middlemen have been loathed for a long time, even though they provide a useful function. But…