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Monday, May 23, 2016 - Weekly e-Newsletter - Issue No. 706

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Economic Calendar
Date
ET
Release
For
Consensus
Prior
May 24
10:00 AM
New Home Sales
Apr
NA
511K
May 25
7:00 AM
MBA Mortgage Index
05/21
NA
NA
May 25
9:00 AM
FHFA Housing Price Index
Mar
NA
0.4%
May 25
10:30 AM
Crude Inventories
05/21
NA
1.310M
May 26
8:30 AM
Initial Claims
05/21
NA
278K
May 26
8:30 AM
Continuing Claims
05/14
NA
2152K
May 26
8:30 AM
Durable Orders
Apr
NA
0.8%
May 26
8:30 AM
Durable Orders, ex-transportation
Apr
NA
-0.2%
May 26
10:00 AM
Pending Home Sales
Apr
NA
1.4%
May 26
10:30 AM
Natural Gas Inventories
05/21
NA
73 bcf
May 27
8:30 AM
GDP - Second Estimate
Q1
NA
0.5%
May 27
8:30 AM
GDP Deflator - Second Estimate
Q1
NA
0.7%
May 27
10:00 AM
Michigan Sentiment - Final
May
NA
95.8
 
This Week in History

5/23/1946 - Railroad Trainmen and Locomotive Brotherhoods started a strike to improve wages after their return from WWII; workers got their wage increase

5/24/1915 - Pan-American Conference took place in DC; its goal was to promote foreign trading and investment to make the US a leader in the world economy

5/25/1805 - Strike by Philadelphia cordwainers (shoemakers) ended marking first time employer sought help from courts to end a strike

5/26/1994 - President Clinton renews trade with China which previously had been suspended for alleged human rights violations

5/28/2003 - Pres GW Bush signed a bill into law calling for $350 billion in tax cuts over a 10-year period

BACK TO BASICS
 

What is the difference between a Trading “System” as opposed to a Trading “Method” or “Technique”?

What distinguishes a “system” from a method or technique is that a trading system utilizes, in a consistent manner, objective criteria based on historical and quantifiable data to analyze trading conditions, and to enter and exit positions. This is particularly true with automated or mechanical systems.

A trading system uses “fixed” entry and exit parameters or set of rules to execute trades. The term “fixed” is important, particularly in the case of automated systems. In contrast, a trading technique or method may also have rules to analyze and execute trades, but those rules can be implemented with a degree of flexibility or interpretation. If a trading system, on the other hand, includes alternative rules or variations, those rules or variations are determined beforehand so that there are no modifications to the rules once the system is in operation.

If a system developer constantly modifies the system, then the stability of the system, even though the changes are for the better, is in question. Why? Because once the system has been modified, then all of the historical performance data upon which the system is based is no longer applicable; change the rules of the system and you change its historical performance. In other words, you now have a trading system that can significantly differ from the original one.

 

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