A Failed Bounce Is Normally Followed By Rising Prices (The Failed Bounce Trading Strategy)

Last Updated on August 26, 2021 by Oddmund Groette

Rob Hanna at Quantifiable Edges had an interesting article some days ago about bounces in the S&P 500. Let’s test his idea and turn it into a testable hypothesis:

The failed bounce trading strategy:

I made some changes to Hanna’s strategy and ended up with these simple rules:

  1. Yesterday’s IBS (Internal Bar Strength) was at least 0.6 or higher.
  2. Yesterday’s low was lower than the lowest low during the five days before.
  3. Today’s close is lower than yesterday’s close.
  4. Exit when the close is higher than yesterday’s high.

The result is like this with 200 shares of SPY traded and 100 000 in initial start capital :

The equity chart looks like this (not good from 2018):


If you would like to have the code for this strategy plus 70+ other free trading strategies published on this website, please click on this link:

For more trading strategies, please click here:


Disclosure: We are not financial advisors. Please do your own due diligence and investment research or consult a financial professional. All articles are our opinions – they are not suggestions to buy or sell any securities.