Swing trading is one of the best ways to make money in the market over a short period.
Today, Nicholas Vardy explains the many factors that lead to swing trading’s remarkable success.
Note from Senior Managing Editor Christina Grieves: Quantitative investing may seem highly complex. In fact, I have a hard time even spelling quantitative. But this type of investing is more accessible to personal investors now than ever before. And the power of quantitative algorithms to identify the best possible investments is one of its biggest advantages. That’s why Nicholas Vardy has harnessed the power of quant analysis to create his new Oxford Swing Trader system. Continue reading to learn why swing trading is so successful, and then take a look at Nicholas’ free Swing Trader Summit if you’re ready to learn more.
On Wednesday, I discussed how the world’s greatest investor – Jim Simons and his quant shop Renaissance Technologies – owes his remarkable investment success to short-term swing trading.
Renaissance has crushed the returns of other investment approaches by relying on swing trades driven by computerized algorithms.
You may have never heard of Simons. But are you a fan of the late, great Jack Bogle, the founder of Vanguard and index investing?
Well, $1 invested in a Vanguard S&P 500 index fund in 1988 would have turned into $20.
Do you admire Warren Buffett? The same $1 invested in Berkshire Hathaway would have grown to $107.
But, had you been lucky enough to invest with Simon’s Medallion Fund, your $1 would be worth about $27,000 now.
What’s the most important conclusion for you as an investor?
A quantitatively driven approach to short-term swing trading is by far the way to make the most money over the shortest period.
The “Inhuman” Success of Quantitative Trading
A recent headline on CNBC highlighted Renaissance’s greatest edge: “The secret behind the greatest modern-day moneymaker on Wall Street: Remove all emotion.”
Put another way…
Quantitative investing algorithms are superior to human investors in every way.
They can pick up on predictable patterns no human could. And they use these patterns to collect massive profits over very short periods.
Algorithms act only on cold, hard logic. Never emotion.
As The Wall Street Journal‘s Gregory Zuckerman, author of a book on Renaissance Technologies, put it, “Too often we get caught up in stories when it comes to stocks… By deferring to models and the scientific method, you don’t fall for things like behavioral biases.”
In short, a quantitative approach solves the problem of cognitive biases that typically cloud an investor’s judgment.
The Secrets of Successful Swing Trading
Swing trading turns out to be a massive piece of the successful short-term trading puzzle.
Yet the principle behind swing trading is surprisingly simple.
Like the ebb and flow of water washing up against an ocean shore, stocks move in waves.
In the past, human traders like Paul Tudor Jones II relied on their finely honed instincts to trade these movements.
Getting in tune with a stock’s rhythm was the …read more
Source:: Investment You