November 2019
Beginner
394 pages
10h 31m
English
We can apply the same concepts of adjusting for volatility measures to trading strategies. Momentum or trend-following strategies can use changing volatility to dynamically change the time period parameters used in the moving averages, or change the thresholds for how many up/down days to count as an entry signal. Another area of improvement would be using changing volatility to dynamically adjust thresholds on when to enter a position when a trend is detected, and dynamically adjust thresholds on when to exit a position when trend reversal is detected.
For mean reversion based strategies, applying volatility measures is pretty similar. In this case, we can use dynamically ...