Welcome to

Trading Tact

Your resource for automated trading strategy development.

Empowering retail traders to create efficient income streams.

Why Automate Your Trading?

Efficiency & Diversification

Simultaneously trade multiple strategies, markets and timeframes, any time of the day.

Determine Strategy Viability

Backtest your strategy to quickly determine its long-term profitability and risk profile. 

Minimize Mistakes

Keep emotions at bay with the automatic execution of your trading rules. 

Strategy Development Roadmap

‘The best trading strategy is the one you create yourself’

Part 1: Getting Started

Basic Strategy Development Concepts

  1. What is an algorithm?
  2. Strategy robustness
  3. Optimization and parameter stability
  4. Backtest precision

Trading Preferences and Goals

  1. Trend following or countertrend?
  2. Trading timeframe
  3. Trading goals

Software

  1. Trading platform
  2. Algorithm programming
  3. Price data
  4. Strategy generation & analysis
  5. Virtual private server

Part 2: Market Research

Selecting an Appropriate Market

Is your trading idea aligned with the market?

Find out by quantifying your market’s historical volatility and trending tendency!

Part 3a: Strategy Development Using MT4

Selecting an Entry

The entry is the most important element of your strategy.

Let’s backtest and optimize three common technical indicators – Bollinger Bands, Donchian Channels and the Commodity Channel Index. Can these do the job?

Selecting an Exit

Good exits preserve capital and maximize profit retention.

Let’s compare the performance of stop losses, trailing stops, profit targets and time stops!

Selecting an Entry Filter

Filters improve your win rate by avoiding unfavourable market conditions.

Will time, trend and volatility filters improve our trading solution?

Part 3b: Strategy Development Using StrategyQuant

Automatic Strategy Generation

Why not harness the power of genetic algorithms to produce profitable strategies?

Check out this step-by-step guide on how to use StrategyQuant’s genetic builder!

Out-of-sample Testing

Out-of-sample testing is a great way to verify your strategy’s robustness.

Leverage StrategyQuant’s efficient backtest engine to backtest your strategy over multiple markets and timeframes!

Walk-Forward Optimization

Walk-foward optimization is another stringent robustness test, and allows your strategy to adapt to changing market conditions through periodic reoptimizations.

This detailed guide shows you how to use StrategyQuant’s walk-forward optimizer.

Monte Carlo Simulation

Monte Carlo simulation uses random sampling to determine the probabilities of different backtest outcomes.

This guide shows you how StrategyQuant’s Monte Carlo simulator can provide a more reliable estimate of your strategy’s risk.

Part 4: Strategy Verification

Tick Backtesting

Backtesting with tick data is the most precise, but is the extra development time worth it?

Find out what types of strategies require a tick backtest, and where to get quality tick data!

Forward Testing

Sometimes called incubation or demo trading, forward testing provides a good estimate of your strategy’s live performance.

Find out what types of strategies require forward testing, and three simple methods to evalaute your test results!

Part 5: Portfolio Composition

Building a Diversified Portfolio

Diversified portfolio trading could be the closest thing to a holy grail.

Here I explain why portfolio trading is beneficial, and address three crucial considerations in portfolio composition: strategy performance, correlations and position sizing.

Part 6: Live Trading

Considerations Before Going Live

Are you finally ready to put money on the line?

Find out how to monitor your strategy performance in real time, and how to develop contiengency plans should it underperform.

Trading Strategies

Should You Use the Kelly Criterion for Forex Trading?

Should You Use the Kelly Criterion for Forex Trading?

The Kelly criterion is a famous mathematical formula that attempts to maximize your long-term capital growth. In this post, I’ll apply it to a EURUSD breakout strategy and explain some of its potential shortcomings when applied to forex trading.

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Laguerre RSI Trend Following Strategy

Laguerre RSI Trend Following Strategy

The Laguerre RSI attempts to improve the responsiveness of the regular RSI, whilst keeping whipsaw trades to a minimum. Let’s see how well it detects short-term pullbacks for a trend following strategy!

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How to Use the Supertrend Indicator

How to Use the Supertrend Indicator

Despite its cool name, the Supertrend indicator often seems to slip under the radar. Here I explain how it’s calculated, and combine it with moving averages to produce a simple trend following strategy.

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Ichimoku Trend Following Strategy

Ichimoku Trend Following Strategy

Like candlesticks, the Ichimoku indicator is a fine Japanese creation. Here I’ll explain how the Ichimoku is plotted, and use it to build a trend following strategy for the USDJPY.

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Forex Trading With Volume – Does It Work?

Forex Trading With Volume – Does It Work?

Volume is seldom discussed in forex trading. But as a stock trader would tell you, volume provides insights into the underlying market sentiment. Here I’ll demonstrate the use of two simple volume filters to improve entry reliability.

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What Is the Kaufman Adaptive Moving Average?

What Is the Kaufman Adaptive Moving Average?

The Kaufman Adaptive Moving Average is a unique indicator that automatically adapts to the market’s noise. Here I explain its inner workings and show you how to build a trend following strategy around it.

read more
Awesome Oscillator Forex Trend Strategy

Awesome Oscillator Forex Trend Strategy

The Awesome Oscillator is one of Bill Williams’ fine creations. It is a simple yet effective momentum indicator that can be a valuable addition to your strategy. Here we’ll use it together with a moving average to fine-tune our trend following entries.

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Dual CCI Indicator Forex Trend Strategy

Dual CCI Indicator Forex Trend Strategy

The Commodity Channel Index (CCI) is an underrated momentum indicator that is often overshadowed by the RSI and MACD. I’ll show you how to build a simple trend following strategy using a pair of CCI indicators!

read more
What is Fixed Ratio Money Management?

What is Fixed Ratio Money Management?

Have you heard of fixed ratio money management? How does it compare to the popular fixed fractional approach? Here I’ll explain how fixed ratio works, and see how it stacks up against fixed fractional money management.

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What Is the Kaufman Efficiency Ratio?

What Is the Kaufman Efficiency Ratio?

Avoiding false breakouts is a common goal among trend traders. The Kaufman Efficiency Ratio provides a simple method of quantifying a market’s noise, helping traders focus on the smoothest trends. Let’s add the efficiency ratio to a simple trend following strategy and see whether its performance improves.

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What Is the QQE Indicator?

What Is the QQE Indicator?

The QQE is a mysterious indicator that sometimes pops up in trading forums. Does it deserve a place alongside the more traditional momentum indicators like the RSI and CCI? Let’s add it to a trend following strategy to find out!

read more
How Good Are The Bollinger Bands’ Trailing Stops?

How Good Are The Bollinger Bands’ Trailing Stops?

Trailing stop losses are a popular feature in many trend following systems. Bollinger Bands, the ever-popular technical indicator among retail traders, actually contain two inbuilt trailing stops. Are these any good? Let’s find out!

read more
Bollinger Bands vs. Keltner Channels

Bollinger Bands vs. Keltner Channels

Bollinger Bands are ubiquitous in the trading world, but there’s less discussion about their lesser-known cousin, the Keltner Channels. Do these perform as well as the Bollinger Bands? Let’s compare them over a broad range of input parameters.

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Strategy Development

How to Get a Realistic Backtest Spread

How to Get a Realistic Backtest Spread

Your choice of backtest spread can certainly make or break a strategy. This post will show you how to study the intraday spread variations of your market, and suggest several ways to avoid paying ridiculous spreads.

read more
Do You Know Your Strategy’s Optimization Profile?

Do You Know Your Strategy’s Optimization Profile?

Your strategy’s optimization profile often reveals its robustness, helping you select strategies that will remain profitable in live trading. Here I explain why an optimization profile is important, and how you can easily obtain one using StrategyQuant’s optimizer.

read more
Out-of-sample Testing Using Monte Carlo Simulations

Out-of-sample Testing Using Monte Carlo Simulations

Traders often use Monte Carlo simulations to estimate worst-case drawdowns, but did you know they can be used for out-of-sample testing too? This post demonstrates the use of StrategyQuant’s Monte Carlo simulator to randomize historical prices and strategy parameters, helping you select robust strategies for live trading.

read more
How Many Trades Should Your Backtest Have?

How Many Trades Should Your Backtest Have?

We all want a large sample of trades in our backtests, but practical limitations such as data availability often get in the way. Here I’ll explain why 30 trades is insufficient, and how you can use standard error to quantify the uncertainty arising from a small sample size.

read more
Build a Diversified Portfolio With QuantAnalyzer

Build a Diversified Portfolio With QuantAnalyzer

The ability to efficiently trade a diversified portfolio of strategies is one of the biggest advantages of algorithmic trading. Here we will use QuantAnalyzer’s Portfolio Master to build a portfolio consisting of high performing, uncorrelated strategies.

read more
Strategy Optimization Using MT4

Strategy Optimization Using MT4

How do you improve your trading strategy in MT4? This post will show you how to optimize the entry and exit parameters for a moving average crossover strategy. Finally, an intraday time filter will be added to help avoid false breakouts.

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Debugging & Backtesting Using MT4

Debugging & Backtesting Using MT4

With a fresh algorithm at your fingertips, how do you verify that it has been programmed correctly? This guide will show you how to use Metatrader 4’s visual backtester to debug and backtest your strategy.

read more
Create Your Trading Algorithm in 15 Minutes (FREE)

Create Your Trading Algorithm in 15 Minutes (FREE)

Converting your trading idea into an algorithm is the first step towards reaping the benefits of automated trading. This guide will cover the creation of a simple moving average crossover algorithm, without any actual programming.

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What Is Drawdown in Trading?

What Is Drawdown in Trading?

Are you getting a comprehensive assessment of your strategy’s downside? This post will discuss several methods to measure drawdowns, helping you build and select strategies that better suit your risk appetite.

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How to Select the Best Trading Strategy Entry

How to Select the Best Trading Strategy Entry

With an abundance of technical indicators available, selecting your strategy’s entry conditions can be overwhelming. This post will illustrate a method to graphically compare the profitability of different entries.

read more

Live Trading

How to Find a Real Trading Guru

How to Find a Real Trading Guru

Every day I come across a trading guru offering educational content on the internet. Many of them speak of huge returns with minimal effort. Should these be trusted? Here’s some tips on how to separate the wheat from the chaff.

read more
How to Enjoy Stress-Free Trading

How to Enjoy Stress-Free Trading

Trading is a great way to make some additional income, but not if you’re constantly pulling your hair out. Here I offer 7 tips to help make your trading profitable and stress-free.

read more
How to Select the Best Forex VPS

How to Select the Best Forex VPS

A virtual private server (VPS) is a virtual computer that you can rent and access remotely. It provides a reliable platform on which to execute your forex strategies. This post will help you decide whether you need a VPS, and show you how to select an optimal VPS.

read more

It’s Never Too Late to Start

‘Today’s Beginner is Tomorrow’s Master’

Make your money work for you!

Make your money work for you!

 

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Get trading ideas and strategy development tips delivered to your inbox!

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Get trading ideas and strategy development tips delivered to your inbox!

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Make your money work for you!

Make your money work for you!

 

Get trading ideas and strategy development tips delivered to your inbox!

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Get trading ideas and strategy development tips delivered to your inbox!

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Make your money work for you!

Make your money work for you!

 

Get trading ideas and strategy development tips delivered to your inbox!

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Make your money work for you!

Make your money work for you!

 

Get trading ideas and strategy development tips delivered to your inbox!

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Make your money work for you!

Make your money work for you!

 

Get trading ideas and strategy development tips delivered to your inbox!

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Make your money work for you!

Make your money work for you!

 

Get trading ideas and strategy development tips delivered to your inbox!

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Make your money work for you!

Make your money work for you!

 

Get trading ideas and strategy development tips delivered to your inbox!

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Make your money work for you!

Make your money work for you!

 

Get trading ideas and strategy development tips delivered to your inbox!

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Make your money work for you!

Make your money work for you!

 

Get trading ideas and strategy development tips delivered to your inbox!

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Make your money work for you!

Make your money work for you!

 

Get trading ideas and strategy development tips delivered to your inbox!

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Make your money work for you!

Make your money work for you!

 

Get trading ideas and strategy development tips delivered to your inbox!

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Make your money work for you!

Make your money work for you!

 

Get trading ideas and strategy development tips delivered to your inbox!

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Make your money work for you!

Make your money work for you!

 

Get trading ideas and strategy development tips delivered to your inbox!

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Make your money work for you!

Make your money work for you!

 

Get trading ideas and strategy development tips delivered to your inbox!

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Make your money work for you!

Make your money work for you!

 

Get trading ideas and strategy development tips delivered to your inbox!

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Make your money work for you!

Make your money work for you!

 

Get trading ideas and strategy development tips delivered to your inbox!

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Make your money work for you!

Make your money work for you!

 

Get trading ideas and strategy development tips delivered to your inbox!

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Make your money work for you!

Make your money work for you!

 

Get trading ideas and strategy development tips delivered to your inbox!

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Make your money work for you!

Make your money work for you!

 

Get trading ideas and strategy development tips delivered to your inbox!

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Make your money work for you!

Make your money work for you!

 

Get trading ideas and strategy development tips delivered to your inbox!

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Make your money work for you!

Make your money work for you!

 

Get trading ideas and strategy development tips delivered to your inbox!

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Make your money work for you!

Make your money work for you!

 

Get trading ideas and strategy development tips delivered to your inbox!

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Make your money work for you!

Make your money work for you!

 

Get trading ideas and strategy development tips delivered to your inbox!

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Make your money work for you!

 

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Make your money work for you!

 

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