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Systematic Trading: A unique new method for designing trading and investing systems by Robert Carver

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Chapter Seven. Forecasts

What do these terms all have in common: breakouts, Elliott waves, Fibonacci waves, exponentially weighted moving average crossover and Bollinger bands? Answer: They can all form the basis of trading rules. These rules give you forecasts of what they think will happen to the prices of instruments you are trading or investing in.

Staunch systems traders use multiple systematic rules like these. But rules can also be extremely simple, like the single rule used by asset allocating investors. It’s also possible to use my framework without any systematic rules at all, as a semi-automatic trader making your own discretionary ...

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