June 13, 2016

101 Trading Ideas

Trading ideas are the lifeblood of every trader, investor, trading desk, and fund. A constant flow of fresh ideas is necessary in order to take advantage of new opportunities and stay ahead of evolving and changing markets. New ideas forecast our relevance to the future; they are the difference between moving forward or being left behind, the difference between staying young or growing old.


101 Trading Ideas helps users quickly create new trading ideas. The centerpiece of this book is a list of over 101 trading ideas, and the purpose of the List is to trigger user-specific trading ideas. The latter part of the book contains seventeen illustrations detailing the process of going from the List to a triggered idea to a trading strategy.

101 Trading Ideas is ideal for traders and firms interested in a systematic way of quickly creating new trading ideas and strategies. The book also contains seventeen rough-draft trading strategies developed from ideas triggered by the List, but those strategies are merely illustrations of the process. The focus of the book and the promise it delivers is the List.

“We all know the old saying that it’s better to teach someone to fish than to provide them with a fish. The book you’re about to read is far bigger than 101 trading ideas because it’s 101 ways to develop trading ideas. If you’re in the business of finding nourishment from financial markets, you’ll find this a most useful fishing guide. Or, as Victor Niederhoffer—the mentor who brought Henry and me together—would say, herein you’ll find a meal for a lifetime, not merely one for a day.”  — Brett Steenbarger, PhD, from the Foreword

101 Trading Ideas is available from Amazon.


Here’s an illustration from the book of going from an idea in the List (trade the path to the outcome) to a triggered idea (what paths does a market take after a really big move) to a trading strategy. There are 17 example trading strategies like this in 101 Trading Ideas.

Illustration #1, Crude Oil

101 Trading Ideas:

#1 Trade the path to the outcome

Triggered Idea:

What paths does a market take after a really big move?

From Triggered Idea to Trading Strategy:

After a big move, does crude oil circle back around to where it started or does it continue on: reversion or momentum? Will the future path be a circle (reversion) or a line (momentum)? As it turned out, this trading strategy favors momentum.

This strategy has the following assumptions:

  • The 9-day lookback covers two Weekly Petroleum Status Reports smoothing turbulence.
  • A move of 5 standard deviations over 9 days is big enough to matter but small enough to generate enough trades.
  • Reversing after 2 days allows the trade to stay in the market while searching for a trend.
  • Holding the trade for 20 days allows the strategy to catch bigger market moves and trends.

Trading Rules:

Long Rules:
Enter long if close today is greater than the close 9 days ago + 5 standard deviations

Short Rules:
Enter short if close today is less than the close 9 days ago – 5 standard deviations

After 2 days in trade if there is a new signal

After 20 days


Equity Curve cl1

≈         Results: January 2006 – February 2016         ≈









9 of 11 years


Next Step Ideas:

Vary timeframes for longer and shorter lookbacks, and vary the standard deviation threshold.

To confirm the presence of a trend, add a longer lookback and combine new lookbacks using “or” to increase the number of trades.