Category: strategies

Larry Connors and Cesar Alvarez revealed a system called Double Seven in their book Short Term Trading Strategies That Work. This is a fairly simple system that at the time

How do you create or build a mean reversion strategy? This article gives you some input and advice on how to develop a mean-reverting strategy and discusses its pros and

Gold is different than stocks: it has no particular use and doesn’t provide any cashflows. If you own stocks, you own something that is producing value. Gold doesn’t produce many

The Average True Range (ATR) was developed by Welles Wilder in the 1970s. In his famous book called New Concepts in Technical Trading Systems, published in 1978, Wilder also published

A bear market is when the price of a financial asset drops in value, normally over an extended period of time. But asset prices go up and down daily, so

Business cycles make different sectors of the stock market perform differently from each other. For example, presumably cyclical stocks and banks tend to move first after a recession (we have

The Chaikin Oscillator was developed by Marc Chaikin in the 1980s. It’s not widely used nor well-known, perhaps for good reasons (we didn’t manage to see much benefits in any

“In the short run, the market is a voting machine but in the long run, it is a weighing machine.” In the short-term, fear and greed is a major driver

Pairs trading involves market-neutral strategies that aim for profits in any type of market, be it sideways, down, or up. Jim Simons’ The Man Who Solved The Market describes the

The stochastic indicator is a standard indicator in any trading platform, but we rarely see it published in any trading strategies. Compared to the RSI, stochastics seems much less popular.

The famous trader and tax rebellion Larry Williams has given names to several technical indicators. Last week we wrote about WilliamsVixFix: WilliamsVixFix explained – does it work? This article explains

Back in 2007, the well-known trader and “indicator innovator” Larry Williams wrote an article in Active Trader about VIX and how you can create your synthetic VIX for any security

Something that a person or a particular group of people want very much to have or achieve. Cambridge Dictionary defines the Holy Grail Many traders are looking for the Holy

Are there any seasonalities in retail stocks? Some years ago, Jay Kaeppel published an article about retail seasonalities. Put short, the best month for retailers are November, March, and February

If you can’t stomach 50% declines in your investment, you will get the mediocre returns you deserve. Charlie Munger The share price of Berkshire Hathaway has declined more than 50%

A reader recently asked if we use Heikin Ashi in our trading. We don’t. Neither of us has ever heard of Heikin Ashi! So what exactly is Heikin Ashi? In

The Sharpe Ratio is a popular and widely used parameter for comparing the return and its risk. The name is given from its inventor, William Sharpe, who developed the ratio

How do you evaluate a trading strategy? In hindsight, it’s easy to judge a strategy by the result – the CAGR or the annual return. However, this is what Annie

This article explains candlesticks and why we like to use candlesticks when displaying charts. Moreover, we test quantitatively 23 different candlestick formations. Perhaps surprisingly, some of the formations work pretty

This article looks at the MACD-indicator, what it is, and how you can use it. Does it work? In which markets does it work best? Which timeframe is best? These

Chapter 6 of Larry Connors’ High Probability Trading contains a strategy called Multiple Days Up (MDU) And Multiple Days Down (MDD). The book was published in 2009, the trading tests

There are many approaches on how to make money in the markets. Some use fundamental factors, others use technical analysis, while others might crunch numbers to get an edge. The

The first trading day of 2021 started with a “mini-crash”. The S&P 500 fell 1.36% and the Nasdaq fell 1.41%. We have previously established the end of the month effect:

In chapter 5 of Larry Connors’ book High Probability Trading, published in 2009, there is a strategy called %b strategy. The book contains many strategies which we test in chronological

The Bollinger Bands are renamed after its inventor, John Bollinger. The indicator was invented in 1980 and made John Bollinger a pretty famous trader. The bands are included in all

On page 279-280 in The Education of a Speculator, Victor Niederhoffer explains his version of the January effect: The gain in January determines the average gain the next 11 months.

The January effect is a well-known anomaly. To our knowledge, it was published as a strategy for the first time in 1962, according to Victor Niederhoffer in the book The

We are now entering one of the (historically) strongest periods of the stock market: the last days of the year plus the first days of the next year. Back in

First things first: The first thing you need to understand is that the perfect strategy doesn’t exist. Many keep looking for the perfect indicator or the perfect setup, or they

Today we continue backtesting the strategies Larry Connors and his team published in 2009 in a book called High Probability ETF Trading. All the strategies were tested on a basket

High Probability ETF Trading, published in 2009 and written by Larry Connors and Cesar Alvarez, contains some interesting strategies. They are all mean revertive and tested on the most popular

Larry Connors and Cesar Alvarez published a book called High Probability ETF Trading in 2009. All of the strategies covered in the book showed great results, but almost 12 years

Moving averages are widely discussed and used in the media and likewise frequently used by analysts when making calls about the future. Most traders and investors have probably heard about