Today we will look at Meb Faber’s Global Asset Allocation portfolio from his book of the same name. The Global Asset Allocation portfolio is a passive investment strategy that aims to provide investors with a diversified exposure to global asset classes. In this article, we will explore the portfolio’s key features, performance, and assess whether…
Today we will look at a portfolio published by Meb Faber in his book Global Asset Allocation. The Global Market Portfolio is a passive investment strategy that aims to capture the returns of the global financial markets by investing in a diversified mix of asset classes. Before 2000, the portfolio did a good job matching…
Trend following strategies and systems are popular, especially in the commodity markets, and we aim to shed some light on this type of investing in this article. In this article, we take a deeper look at explaining what trend following is. Do trend following systems work? Which markets do trend following strategies work on? Are…
Trend following has many followers, for some investors and traders trend following is like a religion. But does trend following work? And if so, why does it work? Yes, trend following does work. If we look at history, even simple trend strategies work remarkably well. In this article, we look at the MLM Index and…
Paul Merriman is a financial advisor and has presented several low-cost “passive” investment strategies. One of them is Paul Merriman 4 Fund Portfolio. What is it, and how has it performed? Paul Merriman 4 Fund Portfolio is a simple investment strategy consisting of four low-cost index funds with large caps, small caps, and small cap…
Peter Lynch is a famous but retired money manager. Lynch managed the Magellan Fund of Fidelity from 1977 to 1990 with outstanding returns: more than double the S&P 500’s return. Lynch made 29.2% annual returns for his investors and retired at his peak in 1990. He was a proponent of value investing, but is perhaps…
The RSI is one of the most popular indicators used in technical analysis. However, most people use it as a mean reversion indicator rather than a momentum indicator. Today, we show you an RSI range-momentum trading strategy. The RSI range-momentum trading strategy uses the RSI as a momentum indicator for identifying uptrends in stocks and…
Becoming a proficient trader involves recognizing when it’s best to trade, making it crucial to identify the art of knowing when to take the front seat. Consequently, determining the most favorable days to trade stocks is just as crucial as any other aspect. So, what are the best days to trade stocks? The best days…
In this article, we will discuss an indicator called SuperTrend, which has a very promising name. So, what is the SuperTrend indicator exactly? The SuperTrend indicator is a type of trend following indicator that was created by trader Oliver Seban. It signals the direction of a trend, its continuation, or changes in direction. Our backtest…
St. Patrick’s Day is an important day for Catholics. Is the day just as green for stocks as for those celebrating? St. Patrick’s Day is one of the best days of the year for stocks, but that is thanks to the performance over the last 30 years. Let’s find out why we celebrate St. Patrick’s…
Despite being much larger than the stock market, the bond market gets much less attention from short-term individual traders. That’s a shame because bonds are great trading vehicles. This article will explore bonds and show you examples of how you can trade them. Why would you trade bond trading strategies? Bond trading strategies are a…
Today we will look at a strategy published by Michael Gayed in his paper An Intermarket Approach to Beta Rotation: The Strategy, Signal and Power of Utilities. Gayed’s paper is among the most downloaded papers on the SSRN website. The strategy consists of a weekly rotation system between the SPY and XLU based on the…
Today we will look at a strategy that saw the day of light nearly 60 years ago. The somewhat cryptic name is the Coppock Curve. What is the Coppock Curve strategy about? The Coppock Curve Strategy was devised by economist E.S.C. Coppock under a mandate from the Episcopal Church to find long-term investment opportunities. It’s…
The stock market is officially open for 6.5 hours daily and has an opening and closing price for each stock. What is the opening price of a stock? The opening price of a stock (or any asset on an exchange) is the price of a security when it opens trading on the exchange at the…
Momentum trading is the opposite of buying low and selling high: momentum is about buying strength. Can we make a successful momentum strategy for S&P 500? Yes, a momentum strategy for the S&P 500 works. We use monthly bars and a simple moving average strategy crossover system. Let’s show you why a momentum strategy works:…
The Golden Cross in trading is famous and a cited phenomenon in the media. In this article, we look at the performance of the Golden Cross in the S&P 500. A Golden Cross involves two moving averages – one short and one long. We use the 50 and 200-day moving averages. A Golden Cross happens…
Jim Simons recently stepped back as the chairman of Renaissance Technologies, the asset management group that manages the most profitable fund ever: The Medallion Fund. What are the secrets and trading lessons of the Medallion Fund’s trading strategies? How has Jim Simons gotten a whopping 66% return on average for over 30 years? What kind…
Let’s look at what happens when you combine long and short strategies. For example, we’ll look at our Strategy Bundle 1 and the Short Strategies Bundle and see what happens when we combine them. Bundle 1 trades SPY (you can also use @ES), while the Short Bundle trades SPY, XLP, and SMH. We make a…
The Internal Bar Strength indicator (IBS) has worked remarkably well for over two decades. We can only guess why, but the stock market has been highly mean-reverting during this period, and this has, of course, given the IBS a nice tailwind. IBS is simply an indicator where you buy on weakness and sell on strength,…
We have put together a “strategy pack” (bundle) of 3 strategies in S&P 500 (SPY or ES). The bundle consists of three strategies that we believe complement each other (charts and data updated per January 2023). In all our bundles you will find both Amibroker code, Tradestation code and th e strategy written in plain English. The…
The options expiration happens on the Friday before the 3rd Saturday of each month in the US. An often referred to effect is the options expiration week effect. Is this effect real, or is it just a myth? In this article, we test the option expiration week effect: S&P 500 shows abnormal positive returns during…
Overnight stock trading strategies are popular for a good reason: they offer good risk and reward. All markets are different and have their own seasonalities and tendencies, but in the stock market, the tendency is for the gains to accrue during the night – ie. an overnight bias. This means that night trading and overnight…
Candlesticks are a popular charting tool and are frequently used by promoters using anecdotal evidence. We use candlesticks in our charts ourselves, but not as a predictive tool in our trading strategies. In this article, we ask: do candlesticks work? Yes, candlesticks work. We test 23 different candlestick patterns quantitatively with strict buy and sell…
Ray Dalio’s All Weather Portfolio is a pretty well-known portfolio, and for good reasons, in our opinion. Ray Dalio and his team at Bridgewater Associates constructed the All Weather Portfolio to withstand every economic environment (and shocks) possible. What exactly is the All-Weather Portfolio? Which assets are included? How has it performed? What was the…
What is the best strategy for swing trading? Is swing trading still profitable? We have summarized 10 free swing trading strategies that might help you start your trading career. The internet is flooded with anecdotal evidence about how to swing trade and how to make money. Unfortunately, almost all articles consist of unproven and untested…
Nassim Nicholas Taleb is a world-known statistician, mathematician, philosopher, trader, and investor, and his primary interests evolve around randomness, uncertainty, and probabilities. Taleb came into the limelight after his book called Black Swan became a best seller, but in our opinion Fooled By Randomness from 2001 is his best and most interesting book, at least…
Today we are presenting three free mean reversion strategies. They were partially published on this website a few years back, and today we make some minor adjustments and present their performance on different ETFs. Furthermore, we discuss why mean reversion works and which markets are best for mean reversion trading strategies, and also some historical…
Mean Reversion Trading Strategies and Backtest. How do you create or build a trading strategy that is based on reverting to the mean? What are the pros and cons of mean reversion trading strategies? Do mean reversion strategies work? This article gives you some input and advice on how to develop a mean reversion trading…
The Turnaround Tuesday Trading Strategy The Turnaround Tuesday effect happens from the close of Monday’s trading session until (at least) the close of Tuesday’s trading session. The effect is no myth! Let’s do some backtesting to find what seems to work and not work. This article looks at the Turnaround Tuesday trading strategy. Buying on…
The 200 day moving average is frequently used as an indicator in the financial markets. Who hasn’t heard about the “Death Cross”, “support at the moving averages”, “the trend is positive because the price is above the averages”, etc.? Among the moving averages, the 200-day moving average is probably the most used and referred to….
Candlesticks are popular. They are very useful for visual displays, but our previous backtests indicate candlesticks might be useful to make trading strategies as well. In this article, we look at what is the best time frame for candlesticks: The best time frame for candlesticks is daily bars and relatively short holding periods from 1…
The lower highs and lower lows pattern signals a downtrend. Is this likely to continue or reverse? What is the meaning of a lower highs and lower lows pattern? In almost all markets, the lower high and lower low pattern signals a short-term reversal. We develop multiple lower high and lower low trading strategies. The…
Which is the best oscillating indicator for trading strategies? When you start out in trading it might be a daunting task to understand all the bells and whistles provided by your trading software. There are plenty of indicators, moving averages, and oscillators to use. How can you use the indicators to make money? In this…
Determining the right mix of assets to help you reach your short-term and long-term financial goals is the key to building a winning investment portfolio. For many years, financial advisors and experts recommend the 60/40 portfolio because of its simplicity and favorable risk-adjusted returns. But given the changing economic situations in 2022 and the 60/40…
How can you hedge against huge losses from totally random and unpredictable events? How can you insure yourself from devastating losses that come out of the blue? This is what tail risk hedging strategies are all about. Tail risks in the stock market are hard to protect against, but in this article, we offer some…
