Stock Trading Strategies Ebook PDF Free Download

 

 
Hello, fellow traders, please allow me to introduce a tutorial handbook - "LIGHTING THE PATH TO PROFITABLE TRADING: A Step-by-Step Guide to Building a Trading Strategy Verification Tool with VBA Macros".

This stock trading strategies PDF guide aims to provide traders with a practical and comprehensive approach to developing and testing trading strategies using Excel and Visual Basic for Applications (VBA). The Ebook covers various aspects of trading, including technical analysis, back-testing, and performance evaluation. This handbook is suitable for traders of all levels, from beginners to experienced professionals, who are looking to improve their trading skills and gain a better understanding of the data science and finance programming. This tutorial includes practical examples, step-by-step instructions, and illustrations to help traders build and test their own trading strategies using Excel and VBA. By the end of this guide, traders will have the knowledge and skills necessary to develop and evaluate profitable trading strategies and make informed decisions in the market.

Besides Introduction, Conclusion, and Author Bio, there are nine main chapters in the handbook:

CHAPTER 1: GETTING STARTED WITH EXCEL AND VBA

This chapter provides an introduction to Excel and Visual Basic for Applications (VBA). Excel is a widely used spreadsheet application that allows users to store, manipulate, and analyze data, as well as create charts and graphs. The chapter covers the calculation of the Simple Moving Average (SMA) and demonstrates how to use Excel's built-in formulas to calculate the SMA. It also introduces VBA, which is a programming language integrated with Excel that allows users to automate tasks, create custom functions, and build complex applications within Excel. VBA is a powerful tool that requires some programming knowledge to use effectively, but it is user-friendly and has many resources available online to help users learn. The chapter concludes by demonstrating a trading strategy that uses VBA to generate signals for buying and selling.

CHAPTER 2: WHAT IS BACKTESTING AND WHY IS IT SO IMPORTANT

Backtesting is a method for evaluating the performance of a trading strategy based on historical market data. By backtesting a strategy, traders can identify flaws and weaknesses in the strategy, set realistic expectations for its future performance, and refine or develop new strategies. To perform a backtest, traders need to define the rules of their trading strategy, gather historical market data, simulate trades using the strategy and evaluate the results based on performance metrics such as profitability, risk, and Sharpe ratio. A practical example is presented, which involves back-testing a trading strategy called the "Two Moving Average Lines Cross" using AAPL's historical data. The example demonstrates how adjusting the parameters of the strategy can lead to significant differences in the results, and how using a VBA macro can save time and money. The chapter concludes by emphasizing the importance of back-testing in avoiding guesswork and mystery in trading and in improving the chances of success.

CHAPTER 3: DATA ANALYSIS WITH EXCEL

It covers the process of importing historical data into Excel for the purpose of building a back-testing spreadsheet. The chapter provides step-by-step instructions for downloading historical stock data from popular sources such as Yahoo Finance, MSN.com, and Google Finance, and explains how to clean and transform the data for analysis. The chapter also highlights the importance of saving the Excel file often and having a backup, as well as double-checking the data before using it in your analysis or trading strategy.

CHAPTER 4: CREATING TRADING STRATEGIES

This chapter focuses on creating trading strategies using Excel formulas and VBA. It begins with an introduction to basic trading strategies such as the "Three White Soldiers" and "Three Black Crows" candlestick patterns. The chapter then provides steps for writing a VBA macro, including declaring variables and turning off automatic calculation for speed.

The main procedure involves initializing and calling subroutines, including the self-verifying procedure and the digging procedure. The self-verifying procedure checks and verifies all formulas in the Excel worksheets to ensure accurate results. The digging procedure uses machine learning techniques to divide historical data into training and testing sets, evaluate performance, and identify profitable parameter combinations.

CHAPTER 5: BACKTESTING YOUR TRADING STRATEGIES

This chapter discusses the importance of back-testing your trading strategies and how to create a back-testing spreadsheet to test your strategies on historical data, and explains that the back-testing VBA Macro will try every combination of the conditions set in the "Scan" worksheet, and simulate a series of trading actions using historical data from the beginning, opening and closing long or short positions based on the signals generated by your trading strategies.

The chapter also provides various methods to run the VBA Macro program. It explains that the back-testing trading simulation record generated by the VBA Macro can be used to easily understand the trading strategy's actions.

And, this chapter concludes that while historical performance cannot guarantee future results, back-testing can theoretically help us make more informed decisions for the future. The process of back-testing ideas can help us avoid blind guessing and imagination.

CHAPTER 6: ANALYZING YOUR RESULTS

This chapter discusses how to analyze the results of back-testing your trading strategies. It highlights several metrics that can be used to evaluate the performance of a strategy, including Profit and Loss (P&L), Win Rate, Turnover Period, Maximum Drawdown, Sharpe Ratio, Average Profit and Loss per Trade, and Average Holding Time. By analyzing these metrics, traders can identify strengths and weaknesses in their approach and make necessary adjustments to improve the strategy's performance. The chapter provides an example of a trading strategy called "Golden Cross and Death Cross" to explain how to analyze the back-testing results. The chapter also emphasizes that profit and risk are inseparable, and individual investment philosophy plays a crucial role in deciding the acceptable level of risk and return.

CHAPTER 7: IMPROVING YOUR TRADING STRATEGIES

This brief covers Chapter 7 of a trading guide, which focuses on improving trading strategies. It highlights some basic techniques, including analyzing results, identifying weaknesses, experimenting with new ideas, keeping a trading journal, staying up-to-date with the latest market data, and seeking feedback. The chapter introduces the concept of "Hybrid Power," which involves blending two or more rules or indicators together to filter out signal noise and identify real trading opportunities. It explains how to mix Hammer and Shooting Star candlestick patterns and RSI indicator to create a Hybrid trading strategy. The brief explains the significance of each of these indicators and their role in the strategy, and provides a simplified example of the VBA code for signal generation.

CHAPTER 8: FORWARD TESTING

This brief discusses the concept of Forward Testing, which is a method used to evaluate stock trading strategies in real-time by applying them to current or future data. The process allows traders to observe how a strategy performs under actual market conditions and make necessary adjustments to improve profitability. Paper trading or demo trading is a simulated trading process that allows traders to practice trading strategies without risking real money. Forward-testing is crucial in the development of a stock trading strategy to verify its robustness repeatedly, especially when new data arises. Transaction costs such as brokerage fees and slippage should be considered to obtain a more accurate representation of the strategy's performance.

CHAPTER 9: RISK AND SAFETY

This chapter highlights the importance of exercising caution and using back-testing as one of many tools in the investment decision-making process. While historical performance can provide valuable insights, it is not a guarantee of future results, and investors should consider a range of factors when making investment decisions.

The chapter also draws parallels between investing and war, emphasizing the need for intellect and courage to make informed decisions and advance towards success. Additionally, it highlights the importance of software and internet safety, providing tips for ensuring the safety of Excel macros. And, the chapter stresses the importance of prioritizing safety in investing, both in terms of decision-making and software security, to mitigate risk and increase the chances of achieving financial goals.

Overall, in this handbook, we have shown you how to build a simple tool to verify your trading strategies' effectiveness, even if you don't have strong programming skills. By using Excel and VBA, you can create a back-testing and forward-testing spreadsheet that will allow you to test your strategies on historical data and up-to-date data. We hope that this handbook has provided you with the knowledge and skills you need to start building your back-testing spreadsheet and testing your trading strategies. Various financial instruments, such as stocks, Forex (foreign exchange), options, futures, cryptocurrencies, and bonds, among others, can be tested using back-testing and forward-testing techniques to evaluate the effectiveness of different ideas and methods. You can download it from this link, and it is totally free!

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