Last Updated on June 19, 2022 by Quantified Trading
What happens when SPY is down 4 days in a row? Let’s test 4 down days in a row trading strategy.
Entry is on the close and exit is on the first day with a close higher than the previous bar.
Four Down Days In A Row Trading Strategy
Why these rules? I believe you will benefit from buying when the risk premium rises and selling when the risk premium declines. In the long term, you should make money doing this.
Since the 1st of January 2005, this has happened 32 times in SPY. There are 25 winners. The total gain is 13.54%. Not the best strategy around, but quite good, IMO.
I also picked some other ETFs randomly:
|Ticker||#Fills||#Wins||Total in %|
Pretty good results, if you ask me!
Here is the chart of SPY and the equity chart above:
As you can see, the 4 down days in a row strategy works reasonably well.
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