Trading Rules

A collection of trading rules from various sources that may be useful for traders and general investors.

The Gartman Letter’s trading rules Short term trading and Survival – Larry Williams
Trading rules of the Turtle System Laws of technical tradingĀ  – John Murphy
Tet’s 10 trading rules Trading and the importance of a plan – Joe DiNapoli
20 golden rules for trading Overvalued stocks and Ponzi schemes – David Tice
“Old rules…but very good rules” Building a margin of safety – Jim Slater
Practical tips, tactics and rules for beginning day traders Behavioural finance – Gary Belsky
Trading rules for swing traders Contrarian advice from Dr Doom – Marc Faber
12 Trading rules for commodity futures traders Trading and Position Sizing – Van Tharp
Trading rules of successful traders The investing methods of Warren Buffett
The performance of technical trading rules Engaging The Great Humiliator – Ken Fisher
Gann’s trading rules Trading and the second marshmallow – John Piper
Linda Bradford’s time tested trading rules The ‘ten commandments’ of trading – Lewis Borsellino
Extract from an academic study ( pdf file, 270Kb) of traditional TA rules like ma’s, channels, support/resistance levels, etc.

“A further purpose of our study is to address this issue by constructing a universe of nearly 8,000 parameterizations of trading rules which are applied to the Dow Jones Industrial Average over a 100-year period from 1897 to 1996. We use the same data set as Brock, Lakonishok and LeBaron (BLL) to investigate the potential effects of data-snooping in their experiment. Our results show that, during the sample originally investigated by BLL, 1897-1986, certain trading rules did indeed outperform the benchmark, even after adjustment is made for data-snooping. We base our evaluation both on mean returns and on a version of the Sharpe ratio which adjusts for total risk. Since BLL’s study finished in 1986, we benefit from having access to another 10 years of data on the Dow Jones portfolio. We use this data to test whether their results hold out of-sample. Interestingly, we find that this is not the case: the probability that the best performing trading rule did not outperform the benchmark during this period is nearly 12 percent, suggesting that, at conventional levels of significance, there is scant evidence that technical trading rules were of any economic value during the period 1987-1996.”