I got the following inquiry from the ever-curious Trader Rod. A few questions concerning correlation between two instruments for the purpose of diversification: 1. When calculating the correlation coefficient, given my timeframe is daily, should I focus on daily closing prices or daily returns? 2. If the answer to previous question is to focus on returns, and the average holding period for a position is one week, should I calculate the coefficient using series of weely returns? 3. What is a good threshold for diversification,...

My British and Aussie/New Zealand readers will understand the above headline, as will those who have spent any time (as I have) with friends or colleagues from there. The rest of you will figure it out quickly enough as you read on. No, it isn’t about urine! :-) Actually, I’m not talking about the whole of Goldman Sachs here. It’s just one analyst based in London (I believe), but does demonstrate that not everyone who works for the company is brilliant. A colleague of mine sent along this story Goldman’s...

According to Google Analytics, October was the second busiest traffic months the site has seen since its inception, coming in just short of April in terms of visits at a bit over 13,000. It’s great to see the long upward slope of the traffic count, especially when something like 80% of that traffic is either coming in from search engines or from other websites referring people here. – meaning it’s mostly new visitors. At the same time, the RSS feed subscriber count is tickling the 1000 level and seems very likely...

It’s hard to believe June is here already. Tomorrow I will be heading out to Los Angeles for the Traders Expo. If you’re going to be there, definitely look for me. I’ll be doing presentations on Friday and Saturday. But enough looking forward! Time to look back, at the top posts from May, as determined by page views, comments, and stuff like that. What are your favorite trading websites? New NFA Rule Impacts More Than Just Forex Hedging Trading Discipline and Playing to Your Strengths No Evidence of Stop...

It was a pretty intense April for this little trading education blog. Through March the most comments I’d seen on any of my posts was something like 17. Last month the discussion around the new NFA rule against “hedging” in the forex market produced more than 100 comments as part of an intense exchange beween those on both sides of the debate. That not only made it the most popular post of the month, it also put it in the top 20 all-time most popular posts. Readership for the blog held about steady for the month....

This little trading education blog had its best month ever for traffic and readership in February, even with it being a short one. Almost 10,000 unique visitors read over 24,000 pages. Here were the most popular individual posts based on readership, comments, links, and all that. Afraid to Trade? Build Your Trading Confidence Most Active Forex Currency Pairs Using Unusual Options Activity to Predict Large Stock Moves Trader: The Paul Tudor Jones Documentary Video The Trade that Hurts the Most January’s Gems Trading...

January was another good month for this trading education blog. Readership continues to grow at a pretty good pace. There were over 7000 visitors who checked out over 17,000 pages worth of content. Both categories are up something close to 10% over December. That’s obviously not blockbuster growth, but I’ll take it since it’s pretty much all organic – no advertising or anything like that. The vast majority of visitors are either referred here by another site or find it through a search engine.  What...

We’re into July. Time to take a look and see what your and your fellow readers found to be the most interesting and useful posts of the last month. Here they are in order of popularity based on a combination of page views, comments, and some other things. A Word of Warning on Trading Vendors Crude Oil Prices and the Economic Stimulus Package Looking for a stock screener? If you have a trading method that works, stick with it! Forex is a scam! Trading System Rules I Disagree With How do I decide which support and resistance...