A leverage trading strategy is a trading strategy that makes use of leverage for the execution of its trades. Financial leverage is the possibility of opening market positions using only a part of the necessary capital. “Give me a lever…
For those who follow social media, you might be aware of the following ratio that is frequently discussed: Nasdaq100 & Treasury Bond Bond relationship. What is it, and is it profitable? In this article, we explain the ratio and we…
Mean reversion trading strategies are still working very well in the stock market, at least in the main indices and the majority of the sectors. Back in 2013, we published a backtest that looked at the performance of S&P 500…
One of the most known factors in investing is momentum. Momentum states that an asset that has been going up is more likely to keep going up in the future than to fall. It has been widely researched by academia…
Almost ten years ago, we traded (for a few months) and revealed a potentially profitable trading strategy for gold miners. The strategy was based on the ETF with the ticker code GDX. How has the strategy performed since we…
Let’s look at an interesting and peculiar pattern in GDX – gold miners: We have in many articles mentioned the tailwind from the overnight edge. We use the following trading rules: This strategy has returned the following equity curve: The…
You might stumble upon supposedly quantitative trading strategies based only on anecdotal evidence in the vast ocean of online resources. However, untested methods and strategies offer little more than hollow promises. We believe in providing examples of strategies that have…
You might have saved up some money and decided to invest. You already know what you want to invest in, but now you have another decision: When should you invest? If you research the subject, you will likely come across…
Detrended Price Oscillator (DPO) is a technical analysis indicator. According to the author’s idea, the indicator is built without considering trend movements on the chart, which allows a more accurate determination of overbought and oversold levels. Similar to a moving…
In previous articles, we highlighted that simple adaptations to a strategy can have a huge impact on the performance of the strategy, its expected rate of return, and risk profile. We’ve seen that entering and exiting the trade on the…
Gold has a rich history dating back thousands of years, admired for its beauty and rarity. It has been used for currency, jewelry, and ornamental purposes across civilizations. But more recently, it has been widely used for speculating in the…
Some signals and indicators try to predict regime changes or future returns in the stock market. One of the most famous is the Breakaway Momentum indicator from Walter Deemer. Another one is the JP Morgan VIX Buy signal. The JP…
Larry Connors is a well-known figure in the world of trading and finance, and he has developed several trading strategies over the years. Larry Connors is a well-known figure in the world of trading and finance. He is an author,…
TikTok is a popular social media platform known for short videos, but it has also become a hub for trading advice and TikTok Trading Strategies. Many traders share their trading strategies and playlist on TikTok, and some have even become…
DAX trading strategies refer to various approaches and techniques used by traders and investors to make trading decisions in the context of the DAX index. The DAX (Deutscher Aktienindex) is a stock market index that represents the 30 largest and…
A well-known “fact” is the end-of-month rally in stocks at the end of the month and the first day(s) of the next month. It’s a lot about it on the web, but as far as I can see no actual…
The day of the week seasonality effect in stocks is strong. Some days are simply better than others. Previously there has been a certain day-of-week seasonality in the S&P 500. Here is a summary of the average gain since 1….
Below you can find the gain each year from 1997 until 2011 in OBX. It’s divided into two: The whole of December and the 2nd half of December. The 2nd half is from the close of the 15th or the…
The Friday seasonality in crude oil trading revolves around a straightforward principle: purchasing oil assets on Thursdays, anticipating a price increase on Fridays. However, the efficacy of this strategy isn’t uniform across all Thursdays. Research indicates that it yields more…
The end-of-month seasonality is strong in stocks. A more updated version of the end-of-month effect was made not so long ago. Let’s make an update and see how it has performed since then: End of Month Trading Strategy In plain…
“Sell in May and Go Away” is a strategy suggesting investors should sell stocks in May and buy back in November to avoid typically weaker markets from May to October. The effectiveness is debated, as results vary year by year….
20+ treasury bonds (TLT) show a significantly different performance depending on the day of the week. Is there any day of the week effect in TLT? Let’s test some day of the week strategies. Assume we start with an account…
Are there any monthly seasonalities in TLT? Yes, just like in stocks there are some strong and weak months. August is, by far, the best month. We are now entering the best month over the last 20 years in long-term…
What is the worst month of the year for stocks? Let’s look at the statistics for the last 50 years and find out. It turns out the historical performance of the months varies a lot. Some months are better than…
There are many effects and seasonalities in the stock market. One frequently mentioned seasonality is the first trading day of the month effect. Is the first trading day of the month effect a myth or fact? In this article, we…
Just like we can develop seasonal trading strategies in the overall stock market, we can find potentially profitable seasonal trading strategies in the retail sector. This article presents one such opportunity. Are there any seasonalities in retail stocks? Some years…
The Holiday effect system in the stock market is a well-known anomaly and seasonality. Is there a way to profit from the holiday effect seasonality? Are there any holiday effects in the stock markets? If so, which holiday is the…
Calendar effects are pretty well known in the stock market, but it’s not many articles out there about calendar effects in long-term Treasuries (TLT). TLT seasonal trading strategies are hard to come by on the internet, but below you get…
Day of the week effect In trading. The weekday effect in trading can be a handy trading edge because trading is about exploiting small trading edges in the market. If you work hard and diversify with different markets, time frames,…
Backtests and statistics of five different futures contracts reveal that most of the price action is random throughout the trading day. However, by implementing one or two extra variables, we find some potential trading edges or strategies. Let’s go straight…
The fourth quarter is a strong period for stocks. But which five-day period is best? We did a test to find out which calendar days of which month produce the best five-day returns. The best five-day periods to own stocks…
Can we find the same Santa Claus Rally in NIFTY as we do in the US? We are approaching perhaps the strongest two/three weeks of the year: the Santa Claus Rally or the end of the year effect. We have…
The Santa Claus Rally In Emerging Markets One of the seasonal strongest periods is approaching: the Christmas holiday. The Santa Claus Rally or the end of the year effect has proven to show strong gains in the US markets and…
The Euro Stoxx 50 has mixed performance the week after futures expiration. Euro Stoxx 50 is a very popular trading vehicle. It’s one of the most traded futures contracts in the world. The contracts expire on the third Friday of…
Trading Strategies for Futures Expiration Week. Our backtests indicate that both DAX 40 and Euro Stoxx 50 have much better performance during the futures expiration week compared to any other random week. Let’s start with the DAX 40 contract: DAX…
Our backtests suggest that NIFTY 50 has a positive end of month effect. A variation of the inputs does not change the result dramatically, thus the end of month effect seems reasonably robust. The end of month effect is well…
Yes, our backtests indicate that there is an end of month effect in Bitcoin and this can potentially be a viable turn of the month trading strategy. The end of month effect, sometimes referred to as the turn of the…
The Euro Bund futures contract shows weak seasonal performance during the futures expiration week. The contract has ticker code FGBL, is issued by Germany, has a maturity between 8.5 and 10.5 years, and one contract has a value of 100…
The Congressional Effect in stocks– we suspect you have never heard of it. Neither had we! But this is one of the many seasonal effects in the stock market. The man behind the effect, hedge fund manager Eric Singer, had…
What time of the day is the most volatile in trading? Most traders assume the first and last hour of trading (in any market) is the most volatile of the day. News from overnight trading needs to be discounted when…
In the United States, a presidential election is held every four years. Those presidential elections have been observed to affect many government sectors, including legislation, international relations, and even the stock market. This occurrence inspired the concept of 4-year presidential…
The Memorial Day holiday is one of the federal holidays in the US. How does it affect trading in the US financial markets? The US financial markets do not open on Memorial Day because it is a federal holiday. Trading…
The Labor Day holiday is one of the federal holidays observed in the US. But does it affect the US financial markets? The US financial markets do not open on the Labor Day holiday, which is the first Monday in…
Monday is the most volatile day of the week for stocks. Volatility can be both good and bad. It’s to your benefit when you get it right but the opposite when you get it wrong. Thus, it might be of…
A good short-term trader preys on volatility. However, volatility can also backfire. What day of the month is stocks’ most volatile? The most volatile day of the month is the first. There are a few other volatile trading days as…
Is it smart to own stocks over the weekend? On of the biggest financial websites writes that the weekend effect is a phenomenon in financial markets in which stock returns on Mondays are often significantly lower than those of the…
Seasonal trends in the financial markets are many, and the stock market is no exception. Some months are better than others. What is the weakest month in the stock market? The weakest month in the stock market is September. The…
One of the most important factors in becoming a good trader is to know when you should NOT trade. The art of when to do nothing and just sit on your hands is just as important as anything else. So,…
What are the best days to trade stocks? The best days to trade stocks are Tuesdays, the first days of a month, the last days of a month, and the end of the year (4th quarter). Becoming a proficient trader…
Holiday effects (or as they are also known calendar effects) are very well-known anomalies in trading. Around these dates, like the 4th of July or Thanksgiving, for example, the market tends to perform better over a short period of time….
Research shows higher stock market returns from November through April than for the rest of the year. Can we confirm that there is a Halloween effect in trading? Yes, there is a Halloween effect in trading. From November to April,…
The even vs. odd days trading strategy shows that most of the gains in the S&P 500 come on even days, not on odd days. It’s a rather peculiar effect but most likely the result of chance. Can we develop…
We did a backtest where we optimized the month and trading day to find the best trading days for the S&P 500 from the year 2000. We remind you that the TRADING day is different from the calendar day. We…
We did a backtest where we optimized the month and calendar day to find the best calendar days for the S&P 500. We backtested the result by entering at the close of calendar day N and selling at the close…
The end-of-month bias (effect) in stocks is well documented. But how strong is the bias? We conduct a simple test to show how strong the effect is. The return in the S&P 500 at the end of the month is…
There is no best trading hour. Backtests of five different futures contracts reveal that most of the price action is random throughout the trading day. However, by implementing one or two extra variables we find some potential trading edges or…
We have in a previous article determined that there is a positive holiday effect in stocks. This effect happens on the days before the holiday. But is there an opposite effect? Is there a post-holiday effect in the stock…
We are strong believers in seasonal trading strategies, and one of the best seasonalities is specific trading days of the month. Most articles about seasonal trading refer to calendar days, but a much more accurate trading term is the trading…
When the weekday markets close, weekend trading springs to life, offering distinct opportunities for those ready to tackle its unique challenges. Our guide demystifies the weekend trading strategy, detailing concrete measures to handle the peculiarities of trading cryptocurrencies, commodities, and…
Is there a distinct trend in the U.S. stock market’s returns during the closing days of calendar quarters? Do investment funds strategically allocate cash to drive up stock prices to enhance portfolio values in quarterly reports? Is there a unique…
There are many seasonal patterns in the US market. For example holiday effects, the end of month effect, the first day of month, and, of course, the ‘Sell in May and go away’ strategy. However, there is also a investing…
The US stock market has a few 3-day weekends (Long weekends) during a calendar year. Is that a buying opportunity? Do stocks drop or rise before a 3-day weekend? In this article, we backtest the performance of a 3-day weekend.Trading…
Many investors focus on searching for seasonalities in the US stock market. However, seasonal patterns can also be exploited in international stock markets. Today we will show you a seasonal trading strategy for the German stock market. It is based…
The Best 6 Months Timing Model strategy by Yale Hirsch is an active and simple strategy that uses market timings and can be implemented using any asset class and portfolio. Using this strategy, you do not need to be in…
September is known for being the worst month of the year for stocks. But is it always like this? We ran some backtests: First, let’s backtest the performance of all months since 1960: The first column shows the month, and…
One of the strongest seasonal anomalies in the stock market is the end-of-month effect. Let’s have a look at how it performs in August/September: The trading rules for the strategy are like this: Trading Rules We go long at the…
Next week is OPEX week (options expiration), and it’s also quadruple witching week. How have the markets performed that week? Let’s have a look at S&P 500 (SPY) and how it performs for the respective months during this week. Trading…
We are approaching the end of September; historically, the end and beginning of a month have been positive. We have covered this anomaly multiple times for the S&P 500/SPY. Let’s find out how Dow Jones Industrial and its ETF (DIA)…
The coming week is the OPEX week of October. We are entering a historically strong seasonal tendency in the stock market (from OCT to APR), and it might be interesting to find out how stocks have performed this particular week…
We made a table that summarizes the best and worst trading days of the month. Because the length of the month varies from month to month (and some months have holidays), we made two tables: one from the start of…
The end-of-month effect (also called the Ultimo Effect) is a well-known trading strategy in the stock market. We have covered this anomaly before. Perhaps what is lesser known is that the effect spills over to the first three days of…
Most readers of this website have probably heard about the Turnaround Tuesday effect in the stock market. But does the day of the week matter if it’s a bull or bear market? Let’s look at how the different days of…
Bitcoin is traded 24/7 and there exists a few seasonal patterns. For example, being invested from 5 PM to 7 PM any day has paid off well, and so has being invested on certain days. Let’s look at a Bitcoin…
New Year’s Eve is often a time for optimism and celebration. Does this spill over to the stock market? Is there a New Year’s eve effect in stocks? There is no particular seasonal New Year’s Eve effect in stocks, but…
Yom Kippur is one of the most important days in the Jewish calendar. However, it is not an official holiday and the market remains open during those days. So the question is, does the market perform well during Yom Kippur?…
Rosh Hashanah in commonly known as the Jewish New Year. This, of course, means a lot for Jewish people, who celebrate it during a three-day holiday. But during that timeframe, the market is generally open. Can we make a profitable…
SPY seasonality trading can be very profitable if done correctly. We like SPY seasonality and have made plenty of SPY seasonality trading. In this article, we look at several SPY seasonality patterns. But first, what is a SPY seasonality? What…
If you’re scouring the calendar for the best trading day of the month, the search ends with actionable insights. Short on speculation and long on evidence, this article zeroes in on the critical question – what is the best trading…
Traders and market analysts keep inventing new tools to navigate the ever-changing landscape of financial markets, and one such tool is the CMO Absolute Indicator. What do you know about this indicator? The CMO Absolute indicator is a momentum indicator…
Buy and hold has worked very well for long-term investors. History has also taught us that active money managers have underperformed S&P 500 or their benchmarks. We dream of becoming Warren Buffett, but most of us are below-average investors. Thus,…
Commodities are difficult to trade profitably, with few strategies offering any statistical edge. Despite this, finding effective commodities strategies might be worth the effort, as they allow for profits that are uncorrelated with those of other strategies and tend to…
Today we will introduce you to two main approaches to investing – passive vs. active investing strategy. An investor with a passive strategy will devote less time to the market and can increase capital at a pace in line with…
For many, owning a business or buying expensive real estate is out of the question. An alternative to growing your net worth over time is to invest in financial instruments such as stocks and bonds. In this article, we look…
The Core 4 Portfolio by Rick Ferri is a “lazy” index diversified investment portfolio that allocates assets across 3 asset classes: stocks, bonds, and REITs. These 3 asset classes are divided into 4 categories: U.S. stocks, international stocks, intermediate bonds,…
The 5 Asset Portfolio by Roger Gibson is a “lazy” index diversified portfolio that allocates assets across 4 asset classes: stocks, bonds, REITs, and commodities. These 4 asset classes are divided into 6 categories: U.S. stocks, international stocks, U.S. bonds,…
The Gone Fishin’ Portfolio by Alexander Green is a “lazy” index diversified portfolio that allocates assets across 4 asset classes: stocks, bonds, REITs and precious metals. These 4 asset classes are divided into 10 categories: U.S. Stocks, U.S. Small Cap…
The Simple Path to Wealth Portfolio by JL Collins is a “lazy” index diversified portfolio that allocates assets across two asset classes: stocks and bonds. These two asset classes are divided into two categories: U.S. stocks and U.S. bonds. Thus,…
You are going to learn about the 22 best investment strategies for 2024 in this detailed article. Learning different investment strategies is important for achieving financial success. Investors, who vary in their risk tolerance from conservative to aggressive, are on…
Throughout history, gold has consistently held its position as the preferred global currency. Now, investors primarily acquire gold as a safeguard against economic instability and, of course, inflation. How does gold perform when inflation is high? Gold has famously been considered…
The Seasonal Timing Strategy by Sy Harding is an active, but simple strategy that uses market timings and can be implemented using asset classes and portfolios. Using this strategy, you do not need to be in the market 100% of…
Let’s say you are a wealthy person who has already achieved FIRE (financial independence – retire early) and wants to preserve your wealth. It doesn’t matter what strategy or portfolio you used to achieve wealth because it requires completely different…
What Are the Best Asset Classes to Get Rich? To become rich, you will need to choose a portfolio that will generate the highest possible return with the lowest potential risk. Imagine that you are a poor person who wants…
There are many ways investors try to determine if the stock market is overvalued or not. Some people rely on technical indicators to gauge whether the market is overextended or overbought, while others employ valuation measures like the P/E ratio,…
The relationship between interest rates and stocks is crucial to understand if you are investing in the stock or bond market. How does the S&P 500 perform when interest rates are rising? Interest rates and the stock market have an…
Imagine what it would be like to have invested $100 in the stock market in 1928 and held on to it until today. What’s the growth of $100 invested in 1928? $100 invested in the stock market in 1928 would be…
The majority of investors think long-term. For instance, most US households, excluding the wealthiest 1%, predominantly keep their stocks, bonds, and bills in retirement portfolios. In fact, those not in the top 1% or even 10% of wealth distribution have…
Stocks can be classified into four factors: value, size, investment, and quality. It is well-known that value stocks perform well, and small caps tend to outperform large caps. However, what about the quality factor trading strategy? The quality factor can…
Factor investing targets securities with specific characteristics, called factors, that have historically been associated with higher expected returns. Common factors include value, quality, momentum, size, and minimum volatility. Factor investing is a strategy that uses various attributes of securities, such…
Warren Buffett is for some considered the best investor of all time. Among his many lessons and contributions to the world of finance, one that stands out is the Warren Buffett indicator. This indicator is a measure of valuation for…
After a positive year for stocks, S&P 500 tend to rise 6.75% the next year, not including dividends. If the S&P 500 drops one year, the next year return is on average 12.1%. After a good year in the stock…
