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Barry Rudd – Stock Patterns For Day Trading And Swing Trading

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This book describes the trading strategies used by a professional stock trader in his own trading. The ideas come both from friends who are successful traders as well as his own experience with SOES trading. The collection of trading patterns described represents one of the first full-fledged books of instruction on short term, swing and day trading in individual stocks. The author’s intraday trend trading approach and his scalping method are both described in detail. He uses the setups daily in his own trading. This manual should prove valuable to the thousands of short term stock traders who seek to make their living from speculating on short term price swings. It is a toolbox for finding high probability trades for success as you trade the stock market. The technical ideas are primarily crafted around the personality of the NASDAQ market but may also be implemented in New York trades.

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Article – Finance – Some Quantitative Tests for Stock Price Generating Models and Trading Folklore

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Five stock price sequences are examined quantitatively for structure as predicated by:

1) a random walk model;
2) a continuously differentiable price process;
3) a dynamic model consisting of transients of 8. discrete process.

The first and third models also make predictions in agreement with trading lore. The date are examined by the method of coincident events. Positive evidence is found for both the random Walk and discrete transient model, and slightly against the continuous price process. The theoretical predictions seems better confirmed by data at price minima than price maxima . The data are in partial disagreement with the predictions of both the random Walk and discrete transient model that large Volume and large second differences of price should tend to occur at the same time. Some confirmation is found for items of trading lore not predicted by theory. The non-random properties of stock prices are primarily found in short interval (daily and weekly) and in individual stock prices as opposed to an average.


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Article – Market-Neutral Investing – Long-Short Hedge Fund Strategies_ Joseph G Nicholas

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The term “market-neutral investing” refers to the use of a group of investment strategies intended to neutralize certain market risks by taking offsetting long and short positionsin related instruments.At fi rst glance, these strategies seem to be quite different. But all market-neutral strategies derive returns from the relationship between long and short elements of the portfolio, whether that relationship occurs within the portfolio or within the instruments themselves. These strategies look for investments that are not correlated. Correlatedinvestments offer similar returns under similar market   conditions. Market-neutral strategies look for pairs of investments that behave differently under a given set of market conditions.

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Asset Pricing with Speculative Trading

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Speculative trading stems from disagreements among traders. Besides the approaches based  on the existence of private information (and noise traders) or the di erences of opinions, Harrison  and Kreps(1978) and Morris(1996) relied on the presence of diverse beliefs to explain speculative phenomena. This paper proposes a new model of speculative trading by introducing rational beliefs of Kurz(1994) and Kurz and Wu(1996). Agents hold diverse beliefs which are  rational” in the sense of being compatible with observed data. In a non-stationary environment the agents may learn only about the stationary measure of observed data. Agents’ beliefs can be non-stationary and diverse even when their stationary measures become the same as that of the data with complete learning.In a Markovian framework of dividends and beliefs, we obtainanalytical results on how the speculative premium depends on the extent of heterogeneity  of beliefs. In addition, we demonstrate the possible emergence of endogenous uncertainty (as de ned by Kurz and Wu(1996)) and the persistent presence of diverse beliefs and positive speculative premiums.

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Asset Valuation Allocation Models

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Speculative trading stems from disagreements among traders. Besides the approaches based  on the existence of private information (and noise traders) or the di erences of opinions, Harrison  and Kreps(1978) and Morris(1996) relied on the presence of diverse beliefs to explain speculative phenomena. This paper proposes a new model of speculative trading by introducing rational beliefs of Kurz(1994) and Kurz and Wu(1996). Agents hold diverse beliefs which are  rational” in the sense of being compatible with observed data. In a non-stationary environment the agents may learn only about the stationary measure of observed data. Agents’ beliefs can be non-stationary and diverse even when their stationary measures become the same as that of the data with complete learning.In a Markovian framework of dividends and beliefs, we obtainanalytical results on how the speculative premium depends on the extent of heterogeneity  of beliefs. In addition, we demonstrate the possible emergence of endogenous uncertainty (as de ned by Kurz and Wu(1996)) and the persistent presence of diverse beliefs and positive speculative premiums.

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Aust Vs Int’l Equity Portfolio Journal

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Often described as home bias, an enduring feature of strategic asset allocations in Australia and abroad is a relatively high weight to domestic assets. This paper analyses whether a home bias to Australian equities can be justified, and concludes that, on the basis of evidence from historic outcomes, investors with very long investment horizons should have held most if not all of those equities in global portfolio decision would have disappointed over many short and even medium-term periods. On balance, on the evidence presented in this paper, it would appear prudent to lean towards inversting at least 50% and perhaps up to 60%-70% of a portfolio’s total equity exposure in international equities.

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Automated Forex EA

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By Winsor A.G.A. Hoang
Forex Trading has been marketed to the average person as his voucher to financial independence and unlimited wealth. With the introduction of so-called veteran trading chat rooms, real time market data, instantaneous trade execution, and trading on the news, there is an enormous amount of information feeding to your home PC or laptop by the internet. The Forex trading claims to provide full time self employment opportunities with a gargantuan payday everyday. This is a dream come true for want-to-be traders.

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Avoiding Mistakes In Forex Trading

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By Abe Cofnas
Adifficult challenge facing a trader, and particularly those trading e-forex,is inding  perspective. Achieving that in markets with regular hours is hard enough, but with forex,   where prices are moving 24 hours a day, seven days a week, it is exceptionally laborious..

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Back To Basics – Historical Option Pricing Revisited

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We reconsider the problem of option pricing using historical probability distributions. We first discuss how the risk-minimisation scheme proposed recently is an adequate starting point under the realistic assumption that price increments are uncorrelated (but not necessarily independent) and of arbitrary probability density. We discuss in particular how, in the Gaussian limit, the Black-Scholes results are recovered, including the fact that the average return of the underlying stock disappears from the price (and the hedging strategy). We compare this theory to real option prices and find these reflect in a surprisingly accurate way the subtle statistical features of the underlying asset fluctuations.eptionally laborious..

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