Adrian Reid explains what data actually works for trading systems. Price is primary. Volume mostly filters for liquidity, not signals. Fundamental data like interest rates help only if you have clean historical data to backtest against.
So price absolutely is the foundation of.
All of my systems. So the vast majority of the systems make most of the decisions based on what price movements are doing. Volume can be helpful. You absolutely need volume for your liquidity filters to determine whether or not that instrument is liquid enough to trade. There are some situations where volume can be useful as a rule.
However, in testing you will find that.
It'S nowhere near as useful as what all of the common technical analysis literature says.
You know, most of the common, commonly.
Written about rules around volume are complete garbage. They don't work, they don't help.
So be open, you know, if you've got some ideas about volume, be open to test them, validate whether they're true or not.
And if they're true, keep them. If they're not, throw them away.
Yeah, so it can be helpful.
I do look at it and I.
Do frequently try and brainstorm it to find new rules relating to volume, but.
Most of the time I find it not that helpful.
Fundamental information can also be useful as long as you've got the full time series of information.
In order to backtest something, you need to know what the value of that thing was at each day in the.
Past.
You know, in real time. Like on October 30, 19, 1997, you needed to know what the PE ratio.
Of that stock was.
But if you wouldn't have known it.
At that date, you can't test with it. So it has to be data that's available in real time, or you know, the delay, so you can take that into account. Make sense.
So there is some fundamental type data.
That can be useful and you can get in real time, like interest rates.
For example.
So you could incorporate an.
Interest rate rule into your systems and that, that can be helpful in some circumstances.
To be completely honest and transparent, I.
Will share with you that in most situations simple is better.
So in most situations, pure price with volume for liquidity actually works better than all of the complicated stuff.
But not all situations. So you know, you want to be open to testing those things, but it's.
Not essential for profitability, it's.
