Learn to build automated trading tools that maximize your profits and maximize your free time.

Find Your Best Market to Trade With the Hurst Exponent

Detect whether a market is trending, mean reverting, or just random with this indicator

April 11, 2022 • Raposa

After five consecutive years of drought, Northern Californians welcomed the heavy rainfall in the winter of 2016-2017. By February, however, the rain had led many to worry about the integrity of ...

Optimize Your Trading Strategy With Python And The Kelly Criterion

Find the optimal amount of leverage and avoid these simple mistakes!

April 4, 2022 • Raposa

Retail traders almost always have small trading accounts. To get the returns they're after, traders frequently take on leverage - often times imprudent amounts in highly levered FOREX accou...

Do Fundamentals Really Drive Stock Prices?

Research in complex systems may hold the key

March 28, 2022, 8:07 a.m. • Raposa

The market is up as consumer sentiment comes in higher than expected! The market is down over war worries! New low in unemployment boosts market outlook as it closes higher! ...

How to find your own Safe Haven investing strategy

Simulating the S&P 500 and Shopping for Portfolio Protection in Python

March 21, 2022 • Raposa

On Sunday September 2, 1666 a small fire started on the premises of the King's baker in London. By Thursday, the resulting inferno--later dubbed the Great Fire--had reduced much of the medie...

How to gamble with demons (and make money doing it)

A deep dive into safe haven investing and managing your risk

March 7, 2022 • Raposa

A demon comes to you one night giving you a simple dice game to play. You're offered the chance to wager your wealth and receive a 50% increase if you roll a 6, 5% bump if you roll 2-5, or l...

How to think about cost-effective risk reduction to protect your portfolio

The way you look at risk is costing you money

Feb. 28, 2022 • Raposa

Can you increase your returns while reducing your risk? Modern finance says this is a ridiculous concept! There's a trade-off, more return requires more risk by definition. Mark Spitznagel...

3 Ways To Trade The Parabolic SAR In Python

Using the PSAR to build momentum and trend following algos

Feb. 21, 2022 • Raposa

Markets can be volatile, ripping higher over a few weeks before accumulating a series of down days. Timing these momentum trades is never going to be perfect, but indicators like the Parabolic S...

How to use Python and the Kelly Criterion to Optimize your Stock Portfolio

Use Python for advanced, dynamic portfolio optimization

Feb. 14, 2022 • Raposa

Position Sizing is often overlooked by the retail trader. Most wind up over betting and taking on too much risk and blowing up their account. On the other hand, investing in very small amounts ...

Adjusted vs Unadjusted Closing Prices and your Trading Algorithm

How does your choice of closing price impact your backtest?

Feb. 7, 2022 • Raposa

My heart began racing when I logged into my brokerage account - my largest position was down 40% from the day before. I started to freak out. It was a normal day in the market - no big crashe...

The Best Investing Strategies to Protect Yourself from Inflation

Algorithmic trading can serve as a key inflation hedge to preserve your wealth

Jan. 31, 2022 • Raposa

Inflation is on everyone’s mind after the Consumer Price Index (CPI) hit its highest level in 40 years . Price inflation means that the dollars in your pocket are buying fe...

The Complete Guide to Calculating the Parabolic SAR in Python

Step-by-step examples and detailed explanations

Jan. 24, 2022 • Raposa

Markets are never flat. They bounce around higher and lower every day, frequently punctuated by momentum moves where they continue higher and higher or lower and lower for a few days in a row be...

Four Reasons Why Retail Traders Lose Money in the Markets

It's your money, don't do anything stupid with it

Jan. 17, 2022 • Raposa

“Retail traders don’t make money in the markets!” If you have ever been interested in trading, you probably have heard this sentiment before. And, to a large extent, it’s true . There have be...

Better to be Rich than to be Right

Have the freedom to go where the markets take you

Jan. 10, 2022 • Raposa

In 2006, the housing bubble was still on the upswing. Interest rates were at all time lows and banks offered NINJA (no income no job applications) to borrowers to get them into a house, no questi...

Trading Algos Aren't as Scary as You Think

What is Algorithmic Trading?

Jan. 3, 2022 • Raposa

Algorithmic trading. The image likely conjures groups of bespectacled nerds (we are a certain type) staring at screens of code and convoluted charts as their systems make trades at lightning spe...

Your Professors are Still Wrong: The Market isn’t Random

Putting the Random Walk Hypothesis to the Test

Sept. 27, 2021 • Raposa

A mainstay of academic research into the market is the Random Walk Hypothesis (RWH). This is the idea that market moves are random and follow a normal distribution that can be easily described ...

Your Professors are Wrong: You Can Beat the Market

But we're not saying it's easy!

Sept. 21, 2021 • Raposa

“I have noticed that everyone who ever told me that the markets are efficient is poor.” Larry Hite If you’ve had any academic training in economics, you h...

How You Can Trade Better Than The Wall Street Pros

Use your small size to your advantage

Oct. 11, 2021 • Raposa

I had a good idea. It was going to make my company millions of dollars per year. It was different, but certainly doable. “How much do you think it will bring in?” our finance executive asked me....

ATR and How Top Traders Size their Positions

Two methods for using ATR to control your risk

Oct. 18, 2021 • Raposa

The most important aspect of trading is managing your risk. It’s not sexy or exciting, but it’s absolutely critical to staying in the game. Read one of Jack Schwager’s Market Wizards books w...

How to Trade like a Turtle without $1,000,000

Constructing a Diversified Trend Following Portfolio from ETFs

Oct. 4, 2021 • Raposa

A simple job ad was placed in a handful of major newspapers calling for participants to be trained as traders. Of the applicants, a total of 23 individuals were chosen to become Turtle Traders: s...

These 3 Simple Techniques can Save you from a Devastating Loss while Trading

How to control your trading algorithm's risk

Dec. 6, 2021 • Raposa

Rule Number 1: Never lose money. Rule Number 2: Never forget Rule Number 1. Warren Buffett Unfortunately, losing money as a trader is inevitable. It’s par...

4 Ways to Trade the Trend Intensity Indicator

Measure the strength of your trend with step-by-step code in Python

Aug. 26, 2021 • Raposa

Determining the strength of a trend can provide a valuable edge to your trading strategy and help you determine when to go long and let it ride, or not. This is what the Trend Intensity Indicato...

Why You Need more Data than You Think in Your Backtest

How much time does a backtest need to be statistically significant?

Sept. 7, 2021 • Raposa

How many years does it take before you can be confident in a trading strategy? Does one great year mean you have a tremendous strategy? Does one bad year mean you should pack it up and try somet...

How to Build a Better Trading System

Six steps to building a potentially profitable trading strategy

Sept. 2, 2021 • Raposa

Most trading strategies you find online are of questionable value. So if you’re going to put your money into it, we suggest you build and test it yourself. Thankfully, building your own strategy...

4 Simple Bollinger Band Trading Strategies

Learn to trade this indicator with backtests in Python

July 19, 2021 • Raposa

Bollinger Bands have been a popular indicator by traders since they were invented in the early 1980’s. They’re calculated in four, easy steps and are intended to provide traders an idea of th...

How to use Bollinger Bands in your Trading System

Step-by-step guide to this popular indicator for algorithmic trading in Python

July 12, 2021 • Raposa

Bollinger Bands — first developed by John Bollinger in the early 1980’s — measure the volatility range of a security over time. They provide an envelop around the price and can be leveraged in ...