Overview of Shift Theory Ratio Trading Techniques

To start Shift Theory Ratios™ are completely new and I am sure over time there will be an entire community built around studying Shift Theory™. That being said the trading techniques I am mentioning are very basic and can be built upon. The one thing I want to mention is Shift Ratios™ are not being sold as a trading system for a few reasons:

  • No Indicator by itself will ever be perfect.
  • The tape determines all price movements.
  • Spread relationships have a large influence prices.

Hybrid Trading or Gray Box Trading

The best way to trade off of any indicator is in a hybrid or grey box trading style. What this means is that you use the indicator as a statically edge but improve your odds with tape reading or spread relationships. Most professional traders strictly trade off of either the tape or spread relationships. Add in the Shift Theory Ratios™ and all of a sudden you odds are greatly increased. Just a FYI, most true hedge funds trade strictly off of spread relationships. For example the spread difference between Live Cattle and Feeder Cattle. There is a statistical relationship between these two symbols that cannot be argued. If one symbol starts acting strong it is only a matter of time till the other follows. That is one of the ways you can apply spread rations to Shift Theory Ratios™.

Choppy Market Trading Techniques

Trend Trading Techniques

Automated Trading Techniques

HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM.

ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.