Stock Trading: When It Comes to the Market, Quantify Everything
We recently took a look at one of the ways that quantitative, statistically-based trading strategies entered the world of stock trading. (read “Quant 101 and the End of the Month Strategy”).
Essentially, it was a matter of having veteran traders relate their stock trading methods to quantitative analysts who, in turn, translated those human insights and experiences into the language of machines, mathematical equations and often complex coding algorithms.
This is why quantitative trading is both very simple to understand and trade on the one hand, yet can involve a great deal of complexity and sophistication when it comes to building (and especially testing) quantitative stock trading strategies, on the other hand.
You can read more about the process of turning everyday market reality into actionable, statistically-based stock trading strategies in the book by Larry Connors, Short Term Trading Strategies That Work: A Quantified Guide to Trading Stocks and ETFs. As Larry noted in the introduction:
It’s one thing for someone to give you a handful of rules and say “trust me, this works.” It’s another thing to have it backed up by statistical evidence … (But) this book is not only about the statistics. It’s about taking statistics and putting them to work.
Here are 7 Stocks You Need to Know for Friday
Of the ten biggest gaining stocks in the S&P 500, nearly half are set to open Friday in overbought territory. Among them are safety stocks like ^BMY^, as well as more volatile technology names like ^RHT^ and ^MU^.
Of those three, MU is the one trading below its 200-day moving average.
Travel and leisure stocks were also among the bigger gainers heading into the final trading day of the week. Up more than 3% are both ^LUV^ and ^CCL^.
Traders looking for pullbacks in stocks trading above the 200-day may want to keep an eye on both ^DF^ and ^ERTS^. Both stocks closed lower for a second session in a row on Thursday and could enter the weekend in oversold territory if sellers in both stocks remain on the offensive for a third consecutive trading day.
If you like the short term stock trading strategies in Short Term Trading Strategies That Work, then you’ll love how we’ve made these strategies easier to trade than ever. Click here to learn more.
David Penn is Editor in Chief of TradingMarkets.com