V. 22:1 (56-58): Boosting Rates Of Return With Noncorrelated Systems by Richard L. Weissman
Product Description
Boosting Rates Of Return With Noncorrelated Systems by Richard L. Weissman
Here’s how adding noncorrelated assets
within a trading system and combining
noncorrelated systems can help your trading.
Mechanical trading systems
offer traders and risk managers
a distinct alternative
to more commonly used
discretionary methods.
Many mechanical trading systems use mathematical technical analysis,
also defined as the mathematical study
of past price history. I will explore methods
of improving rates of return using
mechanical trading systems without significantly
increasing drawdowns. I will
demonstrate how to use noncorrelated
assets within a single trading system as
well as the combination of noncorrelated
trading systems.
One of the simplest examples of a mechanical
trading system is the two–moving
average crossover system. My intention in
this article is purely to show how traders
can improve their rate of return via diversification;
as a result, I have purposely
chosen two systems whose performance
is only marginally profitable.
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