About Me

The Journey Thus Far

Mt Rundle, Canada

Welcome to Trading Tact! My name is Wayne, and this is where I share my thoughts on all things trading-related. Every trader has a journey filled with challenges, and I detail mine below.

Growing up in Singapore, it did not take long to realize the importance of financial security. My engineering job was alright, but I knew I needed additional sources of income. I eventually was drawn into the world of trading, which is all too often promoted as a get-rich-quick scheme requiring minimal effort. In fact, the first trading book I read had the tagline ‘Make 200% profit with 30 minutes a day’. After a year of breakeven trading, I pondered the following issues:

  1. Countless trading strategies are being advertised, and I can never seem to emulate the performance of these ‘experts’. Are these strategies even profitable?
  2. Copytrading seems plausible, but most providers don’t disclose their rules, or have an uncanny tendency to underperform. How can I trust them with my money?
  3. I spend so much time monitoring my charts, fearing I will miss the next great signal. I have little time for anything or anyone else.

These issues led to much frustration and worry. One day I got an email from my broker about automated trading in forex. It immediately made a whole lot of sense. If I could find a way to develop my own testable trading algorithms, I could solve all three issues above. So I dived into it.

Nowadays, many software allow retail traders to conveniently develop and optimize strategies. It takes only a few clicks to add and optimize any number of trading rules. For new traders, this convenience almost invariably leads to the curve fitting trap. Staring in disbelief at my real-time results, I realized a serious literature review was required.

So I spent the next few months devouring books on automated trading. Perry Kaufman, Emilio Tomasini, Kevin Davey, Keith Fitschen and George Pruitt were some of the authors I particularly liked. I processed the vast amount of information, tailored it to suit my needs, and eventually created the strategy development process that I share on this website. It is but one of the many ways to develop successful strategies, and I encourage readers to use the information on Trading Tact as a starting point to develop their own customized methods.

I created Trading Tact to achieve the following:

  1. Serve as a source of information for technical trading and strategy development techniques
  2. Address some of the myths and pitfalls surrounding algorithmic trading
  3. Provide a platform for trading discourse and build a community of like-minded traders

Here you won’t find:

  • Get-rich-quick schemes
  • The ‘real’ way to trade
  • ‘Secrets’ or ‘loopholes’ nobody is telling you about
  • Other forms of BS

I hope to provide actionable insights that you can reference for your own trading.

By collectively learning, creating, and sharing, we can all benefit and grow as traders.

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Popular Posts

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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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!

read more
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.

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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!

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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!

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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!

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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Disclaimers & Disclosures

Data, information, and material (“content”) is provided for informational and educational purposes only. This material neither is, nor should be construed as an offer, solicitation, or recommendation to buy or sell any securities. Any investment decisions made by the user through the use of such content is solely based on the users independent analysis taking into consideration your financial circumstances, investment objectives, and risk tolerance. Neither Tradingtact.com nor any of its content providers shall be liable for any errors or for any actions taken in reliance thereon. By accessing the Tradingtact.com website, a user agrees not to redistribute the content found therein unless specifically authorized to do so.

Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in any market. Don’t trade with money you can’t afford to lose. This website is neither a solicitation nor an offer to Buy/Sell in any market. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this website. The past performance of any trading system or methodology is not necessarily indicative of future results.

Hypothetical performance results have many inherent limitations, some of which are described below. No representation is being made that any account will or is likely to achieve profits or 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 results is that they are generally prepared 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 or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the 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.

The materials on Tradingtact.com are provided “as is”. Tradingtact.com makes no warranties, expressed or implied, and hereby disclaims and negates all other warranties, including without limitation, implied warranties or conditions of merchantability, fitness for a particular purpose, or non-infringement of intellectual property or other violation of rights. Further, Tradingtact.com does not warrant or make any representations concerning the accuracy, likely results, or reliability of the use of the materials on its Internet web site or otherwise relating to such materials or on any sites linked to this site.

The materials appearing on Tradingtact.com could include technical, typographical, or photographic errors. Tradingtact.com does not warrant that any of the materials on its web site are accurate, complete, or current. Tradingtact.com may make changes to the materials contained on its web site at any time without notice. Tradingtact.com does not, however, make any commitment to update the materials.

Tradingtact.com has not reviewed all of its linked websites and is not responsible for the contents on these websites. The inclusion of any link does not imply endorsement by Tradingtact.com of the site. Use of any such linked websites is at the user’s own risk.

This website may be compensated by companies mentioned through advertising, affiliate programs or otherwise. Any references to third party products, rates, or websites are subject to change without notice. Please do the appropriate research before participating in any third party offers. TradingTact.com does its best to review and screen each product before mentioning.

Email: wayne@tradingtact.com
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Privacy Policy

Introduction

Trading Tact (“we” or “us” or “our”) respects the privacy of our users (“user” or “you”). This Privacy Policy explains how we collect, use, disclose, and safeguard your information when you visit our website www.tradingtact.com, including any other media form, media channel, mobile website, or mobile application related or connected thereto (collectively, the “Site”). Please read this privacy policy carefully. If you do not agree with the terms of this privacy policy, please do not access the site.

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This policy is effective from [28th December 2020].
This policy was last updated on [28th December 2020].

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California Privacy Rights

California Civil Code Section 1798.83, also known as the “Shine The Light” law, permits our users who are California residents to request and obtain from us, once a year and free of charge, information about categories of personal information (if any) we disclosed to third parties for direct marketing purposes and the names and addresses of all third parties with which we shared personal information in the immediately preceding calendar year. If you are a California resident and would like to make such a request, please submit your request in writing to us using the contact information provided below.

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Contact Us

If you have questions or comments about this Privacy Policy, please contact us at:

Wayne@tradingtact.com

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