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Trade with the Odds: How To Construct Market-Beating Trading Systems, + Website by Anthony Trongone, PHD, CFP, CTA

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Chapter 13

Predictor Variables

Study the art of science.

Study the science of art.

Develop your senses.

Especially, learn to see.

Realize that everything connects to everything else.

—Leonardo da Vinci

The systems in this chapter are unlike earlier strategies because the focus of our trading decision is not derived from the instrument we are trading, but from a contributory variable.

This study utilizes the eurozone currency (EC) contract1 as a leading variable for trading the ES (equities) contract as well as the GC (gold) contract. In implementing these systems, we are going to inspect two aspects of the euro over 712 trading days: its 06:00 price, which varied from $1.1911 to $1.5121, along with its price direction from 06:00 to 09:00.

Although ...

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