Drawdown - Days to recovery of equity chart

A Graphic Approach to visualize Drawdown

Trading is about time and money. Combining these two figures into one drawdown indicator gives you a visualization of these two key factors. Trading strategies experience drawdowns from time to time. This is nothing you can avoid. You only can make sure to adjust the trading strategy if the current drawdown exceeds the historic one. So, one key number will

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Sharpe Ratio comparison of two assets

Sharpe Ratio Indicator: Scan for Performance

The Sharpe Ratio is a measure for risk-adjusted returns, developed by Nobel Laureate William F. Sharpe in 1966. It describes the volatility-adjusted excess returns of an asset over a risk-free return. This article highlights the thoughts behind the Sharpe Ratio formula and some practical applications of it when selecting different asset classes.

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Outperformance Portfolio Backtest

Outperformance: Find the right Stocks to beat the Index

Whenever you try to beat an index you will have to be invested in an asset which outperforms your benchmark. This article is about how to calculate outperformance and how to make use of it. In its most simple definition outperformance just means that one asset is performing better than an other asset. But this simple definition is not enough for investors.

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Parabolic SAR with ADX

Parabolic SAR – Profit from the Parabola.

The Parabolic SAR is an indicator that uses a curve to highlight a trend. A Parabola is a symmetrical plane curve. Consequently, Parabolic motion is experienced by an object that when thrown, moves along a curved path.¬† In relation to charts, let’s assume the object to be the price and the curve the general motion of that price. If we

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Volatility projection Indicator

Volatility Projection

Today the market moves up, tomorrow it might move down, but is this of any importance or just random noise? This volatility projection indicator will tell you if there is something exceptional happening. Standard Deviation and Volatility Projection The standard deviation of market movements is a widely used measure to define exceptional events on the market. An example: Bollinger Bands 

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Crash Correlation index can be used for better hedging an index

Crash Correlation Indicator

The crash correlation indicator will tell you if a specific instrument is a good source of diversification of your portfolio. As you know, correlation can be a tricky thing. Under normal conditions a stock might only be loosely correlated to its index, but when there is a strong market movement, correlation will change to nearly 100%. This indicator visualizes this

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