For example, suppose that a trader devises a trading system that generates a buy signal when the 10-day moving average crosses above the 50-day moving average and a sell signal when the 10-day moving average crosses below the 50-day moving average.By applying these rules to historical prices, traders can see how much they could have generated and the volatility risks taken in the process [see also Ultimate Guide to Bollinger Bands].In befitting this complimentary puzzle, Lie glare off a firestorm with devoid and far-reaching hind-policy means.
And while the broader markets fell this week, some of the sector indices that focus on tech -- which has been by the backdating scandal -- were actually up at the end of the week.
There are many tools available to assist in the process of developing and backtesting trading systems across many different markets, including both equities and forex markets.
Trading systems consist of computer programs that automate the process of buying and selling securities based on a set of rules.
And while investors may be growing numb to the options scandal, federal regulators certainly are not, says Pip Coburn, a portfolio manager and consultant at Coburn Ventures.
That means that the issue will likely stay in the headlines -- and the news could get worse for some companies.