Statistics for Traders
Statistics is one of the most misunderstood and abused subject in mathematics (and science). The reason is something we can all easily understand – statistics is something we can all sort of relating to but counter-intuitive when applied in event by event situations.
Our brains are wired that way so that our ancestors can survive in nature. Since human has not evolved into any better forms for quite some time, yet our civilization is advancing in such a pace that even our computers are outdated every year or two, our minds are not that cooperative when it comes to making decisions that are drastically different from the ones that our ancestors faced. The ability to adapt our minds in making proper trading decisions boils down to our ability in applying logical thinking and statistical analysis properly.
It all sounds so complicated but in reality all you have to do is to take time understanding some basic concepts in statistics, then utilize the distilled rules and concepts to make better trading decisions, as oppose to relying on our gut feelings.
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S&P Week Range Behaviour
A simple statistical exercise showing how S&P weekly trading range is closely related to and affected by its prior week’s trading range. The Distribution Following is a distribution chart of the weekly trading range represented in percentage te ...
A simple statistical exercise showing how S&P weekly trading range is closely related to and affected by its prior week’s trading range. The Distribution Following is a distribution chart of the weekly trading range represented in percentage te ...
Seasonality With Job Seeking
A picture is worth a thousand words. Following is the Google Trend on the word jobs searched across the globe since 2004. Notice how the search for the word drops consistently near the second half of each year. Then spike back up in the beginning ...
A picture is worth a thousand words. Following is the Google Trend on the word jobs searched across the globe since 2004. Notice how the search for the word drops consistently near the second half of each year. Then spike back up in the beginning ...
Some Thoughts on "Nassim Taleb on Living with Black Swans"
First it is a good read - Nassim Taleb on Living with Black Swans Several interesting parallels on Nassim's take on the current situation in the financial system to individual traders or trading models - Traders who never experienced significan ...
First it is a good read - Nassim Taleb on Living with Black Swans Several interesting parallels on Nassim's take on the current situation in the financial system to individual traders or trading models - Traders who never experienced significan ...
SPY Range Expansion Behaviour
This is a study on the probability of SPY expanding its range as a multiple of the average range over 10 days period. The study was originally done by our member smilingsynic. I am just reproducing the results here using data from 1993 up to last Fr ...
This is a study on the probability of SPY expanding its range as a multiple of the average range over 10 days period. The study was originally done by our member smilingsynic. I am just reproducing the results here using data from 1993 up to last Fr ...
Studying Your Data Across All Bar Sizes
Have you ever wonder why you like to use 5-minute bars to trade something, and then, all of a sudden, switch into another time frame like 15-minute bar to monitor another instrument. Why we somehow have different level of comfortability with differen ...
Have you ever wonder why you like to use 5-minute bars to trade something, and then, all of a sudden, switch into another time frame like 15-minute bar to monitor another instrument. Why we somehow have different level of comfortability with differen ...
Survival Guide To Trading Nonfarm Payroll Report Week
US Nonfarm Payroll (NFP) Report is a monthly report coming from Bureau of Labor Statistics (BLS) that summarizes the employment condition within United States. The week of NFP Report has a special bias that all traders should be aware of. The Irregu ...
US Nonfarm Payroll (NFP) Report is a monthly report coming from Bureau of Labor Statistics (BLS) that summarizes the employment condition within United States. The week of NFP Report has a special bias that all traders should be aware of. The Irregu ...
Survival Guide To Trading The Stock Market Month Ends
End of month trading is different from other trading days because several classes of market participants would join the game during this time. Long side only funds often make adjustments to their portfolios during the last three to five trading days ...
End of month trading is different from other trading days because several classes of market participants would join the game during this time. Long side only funds often make adjustments to their portfolios during the last three to five trading days ...
Survival Guide To Trading The Stock Market Option Expiration Weeks
Option expiration weeks offer a lot of trading opportunities that the other weeks do not because the option market makers (can be firms, professionals, or anyone who has enough capital doing it) have to adjust their positions fiercely so that they ca ...
Option expiration weeks offer a lot of trading opportunities that the other weeks do not because the option market makers (can be firms, professionals, or anyone who has enough capital doing it) have to adjust their positions fiercely so that they ca ...
Teaching a Grade 4 on Probability
Before summer started, my son was learning probability at school and his teacher gave his class some interesting questions to solve. The background is that they've just learned fraction, decimal numbers, etc. The Coin Toss Game How likely you a ...
Before summer started, my son was learning probability at school and his teacher gave his class some interesting questions to solve. The background is that they've just learned fraction, decimal numbers, etc. The Coin Toss Game How likely you a ...
Thanksgiving Week Bias
Thanksgiving in US is the 4th Thursday in November. Here is what to expect during this week based on the Thanksgiving weeks over past 19 years for SPY and 13 years for QQQ Expectation SPY QQQ Volume Compari ...
Thanksgiving in US is the 4th Thursday in November. Here is what to expect during this week based on the Thanksgiving weeks over past 19 years for SPY and 13 years for QQQ Expectation SPY QQQ Volume Compari ...
