The document discusses creating a trend following trading strategy through research and innovation. It describes analyzing historical price charts to identify trends and developing technical indicators to define trends. The strategy aims to take advantage of trends while limiting losses through money management principles based on average true range measurements. The strategy is intended to be backtested across different markets to generate positive returns over time despite many losing trades from false signals.
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Creating Trend Following Strategy through Research
1. Creating a Trend Following Strategy through
Research and Innovation
By
John Sheely
Copyright 2013 John Sheely All Rights
1
Reserved
2. Risk Disclosure
There is a very high degree of risk involved in any type of
trading. Trading or Investing in stocks, commodities,
FOREX, or options is not suitable for all investors. Past
results are not indicative of future returns.
Individual performance often depends upon an individuals
unique skills, time commitment, and effort.
All comments made herein are for educational purposes
only and should not be construed as investment advice
regarding the purchase or sale of securities, options,
futures, forex, or any other financial instrument of any
kind. Consult with your investment advisor before making
an investment decision regarding any asset class
mentioned herein.
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3. HYPOTHETICAL RESULTS DISCLAIMER
Hypothetical Performance results has many inherent limitations, some
of which are described below. No representation is being made that
any account will or is likely to achieve profits are losses similar to
those shown. In fact, there are frequently sharp differences between
hypothetical performance results and the actual results subsequently
achieved by any particular trading program.
One of the limitations of hypothetical performance is that they are
generated with the benefit of hindsight. In addition, hypothetical
trading does not involve financial risk and no hypothetical trading
record can completely account for the impact of financial risk in actual
trading. For example, the ability to withstand losses are material
points which can adversely affect actual trading results. There are
numerous other factors related to markets in general or to the
implementation of any specific trading program which cannot be fully
accounted for in the preparation of hypothetical performance results
and all of which can adversely affect actual trading results.
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20. A Different Point of View
• One question that all traders and investors ask is whether any
market reversal from a previous trend is merely a correction
of that trend or whether the reversal is the start of a new
trend in the opposite direction.
• There is an answer to that question that is backed by
thousands of hours of research.
• In the coming months, I plan to answer that question by
introducing an entirely different way to analyze prices.
• Look for my detailed book on the subject to be published later
this year.
Copyright 2013 John Sheely All Rights
20
Reserved