Learn about investing, trading, retirement, banking, personal finance and more.
Trading models are emotionless systems for decision-making in trading that can be automated or just used for reference.
They tend to have logical parameters, such as “if x, then y” which can use popular trading indicators to implement a strategy that might only be used in certain conditions. Trading models are strategies employed with a specific design.
Different trading models will use different technical indicators or types of charts to define and search for certain conditions in which a strategy can be used. Once the conditions are met, the model provides the decision-making logic that is intended to carry out a profitable trade without guesswork or emotion.
Many chartists seek to exploit the emotional inefficiencies of the market, where investor sentiment has pushed prices too high or two low and created a buying or selling opportunity as prices regress back toward the mean or continue their previous trend.
In this section, we will discuss some popular trading models that might even help you construct your own.
Notional Value is used in futures and options to describe the total value of the principal of a contract or transaction
You may wish to construct your own asset allocation, but there are asset allocation programs available which can take...
Gold ETFs work by holding some amount of gold in trust and then selling shares of the fund that owns it
The Short Interest Ratio (SIR) measures investor sentiment for a given company and is calculated using the number of...
A dividend yield is a ratio that represents how much a company pays in annual dividends relative to its share price
The Law of Demand states that as prices increase, demand will decrease, and vice versa. That is to say, inversely related
Adaptive Price Zone is a volatility-based trading indicator. Similar to traditional Bollinger Bands
Cash flow after taxes (CFAT) is nearly the same thing as EBITDA, but with taxes left in
Pegged currencies are not discussed often in the Forex market because their value is tied directly to the value of another
The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a federal law that mandates employers to keep you...