# Tag: mean reversion

## RSI(2) On QQQ (Nasdaq)

Back in 2016 I published an article on using short term RSI (relative strength index) on SPY. Let’s test how a slightly different strategy performs on QQQ: RSI(2) must be lower than 10. IBS must be lower than 0.2 (read here for an explanation of IBS). If both 1 and

## Moving Average and ATR As Mean Reversion

Today I came across an unpublished article I started way back in 2012. The strategy is as follows: Calculate a moving average of the last 15 days’ closing price. Calculate the average true range (ATR) of the last 15 days. Subtract 2 multiplied by 1.5 from number 1 (1.5 times

## Some Thoughts On Stop-Loss And Why I Don’t Use Them

Many traders swear to stop-losses by default, but to me it doesn’t make sense because: If you buy something at 100, why should you just put in an arbitrary stop-loss level? If you bought something at 100, presumably it’s because of value or some quantified reasoning. If you use stop-loss

## S&P 500 Mean Reversion Using IBS and RSI

Below is a simple and easy trading strategy to implement in SPY or S&P 500: IBS (internal bar strength) must be lower than 0.25 (using daily bars). RSI (21) must be below 45. If 1 and 2 are fulfilled, go long at close. Exit when close is higher than yesterdayâ€™s

## Nasdaq (QQQ) Mean Reversion

Below is a simple and easy trading strategy to implement in QQQ: IBS (internal bar strength) must be lower than 0.25. RSI (5) must be below 25. If 1 and 2 are fulfilled, go long at close. Exit when close is higher than yesterday’s high (you can use higher than

## 3 Day Low in ETF’s

Larry Connors have written a strategy called the double 7. This is a very simple strategy with just two rules. The less rules, the better, because less probability of curve fitting. This strategy is based on 7 days low (and high for exit), but in my testing it seems to

## When SPY Diverges From Recent High And Low: A Daytrading Strategy

S&P 500 has historically a strong tendency to revert to the mean. I’m looking to find a way to fade the gap. My research has indicated that fading the gap is best after a strong move to either direction. Here are the criterias for a reasonable solid fade the gap

## Two Big Down Days In A Row In SPY

On thursday we had the second “big” down day in a row in SPY, with two days in a row with more than 1% each day. This does not happen very often. Knowing that SPY tends to revert to the mean: Can we make money by going long on the