A Simple Pair Trade Strategy In Liquid ETFs (Pair Trade ETFs)

A Simple Pair Trade Strategy In Liquid ETFs (Pair Trade ETFs)

Many traders are pair trading ETFs. Pairs trading is one method of making your strategy less exposed to market fluctuations. Most traders trade stocks, but you can, of course, also trade ETFs. If you are trading ETFs you indirectly have a wide diversification, albeit to different segments of the stock market. In this article, we…

Trade The Boring Consumer Stocks When They Open Down And Yesterday Was A Down Day – A Day Trading Strategy

Trade The Boring Consumer Stocks When They Open Down And Yesterday Was A Down Day – A Day Trading Strategy

This was a long headline, which probably won’t catch many readers. Anyway, the trading strategy has proven to perform well in the past but in the last years up to 2021, it has been rather flat. In trading, boring is good. The strategy is tested on the ETF with the ticker code XLP. A day…

4 Overnight Trading Strategies In The S&P 500 (Night Strategies From Close To Open)

The overnight edge in the stock market is well documented: By using the tailwind from the close until the next open, you can develop some good short-term trading strategies. In this article, I present 4 overnight trading strategies in the S&P 500. The strategies buy at the close and sell the next day’s open. Because…

Is Trend Following Dead (again)? Or Just The Normal Out-Of-Favor Cycle?

Is Trend Following Dead (again)? Or Just The Normal Out-Of-Favor Cycle?

On the internet and in the blogosphere there are a lot of articles saying trend following is dead. The reason is as usual due to lack of returns over some period of time. Is trend-following dead (again)? Or is this just the normal out-of-favor cycle that shakes out many managers before trend-following starts working (again)?…

Be Aware Your Ego, Be Humble And Open Minded In Trading (Case-Study: Okumus Capital)

Be Aware Your Ego, Be Humble And Open Minded In Trading (Case-Study: Okumus Capital)

Once in a while, I grab one of my about 100 trading/investing books. This is mainly to get inspiration and perhaps one or two ideas to test. The best books for inspiration are the Market Wizards by Jack Schwager. Over the weekend I read the chapter about Ahmet Okumus from The Stock Market Wizards. He…

The Momentum Strategy In S&P 500 During The Last Hour (Momentum Day Trading Strategy)

This article presents a last hour trading strategy. This is in practice a momentum strategy. Here is the hypothesis: if SPY rallies from the open and until the last hour, can we make money by going long one hour before the close and exit on the close? This is a “last hour” trading strategy: The…

Day Trading SPY: Returns In The First Hour, Middle of The Day and The Last Hour

In day trading, what are the returns in the first hour, middle of the day, and in the last hour? I have lately broken down the trading day into performance during the first hour, the middle of the day, and the last hour. Previously I have written two articles about when SPY establishes the high…

5 Day Low and Gap Down

Yesterday (on the 23rd) SPY closed below the previous day’s 5 day low. Even more, SPY gapped down and never traded over the previous day’s low. Some days back I wrote an article about a possible strategy to buy SPY when it closed below the previous day’s 5 day low. That strategy is in my…

The Importance of Good Data Sets When Backtesting (Garbage In Equals Garbage Out)

Good data is important in trading. After ten years of day trading, I have experienced the expensive way the importance of good data. The famous saying “garbage in, garbage out” is indeed true. Your backtest is only as good as the data you are testing on. Make sure you are backtesting on reliable and “clean”…

When SPY/S&P 500 Closes In the Bottom of Today’s Range (IBS)

Mean reversion strategies work well in the stock market. One of the best indicators for such strategies is the¬†Internal Bar Strength Indicator (IBS): (HIGH-CLOSE)/(HIGH-LOW) This simple formula increases the odds a lot, in my experience, for mean-revertive assets like stocks and stock indices. Here is an example: Enter at close if the above formula is…

Disadvantages Of Backtesting (Why Backtesting Doesn’t Work)

You rarely manage to find trading strategies that perform better in live trading than in backtests. Why is it so? This is because of the disadvantages of backtesting. You need experience in backtesting to avoid the many pitfalls along the way. In this article, we look at the disadvantages of backtesting. There are many reasons…