Volume is one of the most overlooked aspects of technical analysis. Most traders rely heavily on price indicators, even though volume can reveal hidden momentum and confirm (or contradict) price action. One way to quantify volume strength is to use…
How a psychological bias – the repurchase effect – predicts lower future stock returns. We show you a investor regret trading strategy. Have you ever sold a stock too early and watched it soar—and felt that pang of regret? What…
In this article, we backtest Larry Connors‘ 3 day high/low Method/Strategy. How has the strategy performed since it was revealed in his book in 2009? The 3 day high/low method/strategy performed well in Connors’ book, and it still works pretty…
In finance, markets are generally believed to be efficient, meaning predictable patterns should quickly vanish through arbitrage. However, groundbreaking research by Heston et al. (2010, 2011) uncovered a peculiar regularity: the intra-day stock return periodicity puzzle. This puzzle describes a…
For many, the approach is to buy low and sell high. But that is not the case with the 52-week high trading strategy – you do the opposite. What is the 52-week high trading strategy? The 52-week high strategy is…
If you’ve dipped your toes into cryptocurrency, you know how wild the market can be. Unlike traditional assets like stocks, which are tied to company fundamentals, crypto prices are driven almost entirely by simple supply and demand. This reliance means…
The Copper/Gold ratio trading strategy seems to offer good entry points for both copper and gold. We backtest the ratio and find positive results for the next one to 12 months after a signal is triggered. Copper and gold are…
Today we test Larry Connors‘ R3 strategy and we continue backtesting the trading 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 of 20…
This article challenges the conventional wisdom that long-term investing in triple leveraged ETFs (TLETFs) is an “anathema” due to issues like daily rebalancing and “beta slippage” or the “constant leverage trap,” which often lead to poor long-term performance. We show…
A recent academic paper titled “An Information Factor: What Are Skilled Investors Buying and Selling?” introduces a fascinating, evidence-backed trading strategy that builds on a deceptively simple premise: Follow the money — but not just any money. Follow the informed…
The increasing accessibility of computational power and public data has recently spurred greater investor reliance on technical analysis techniques. This environment makes it feasible to evaluate and back-test various trading methodologies thoroughly. Technical analysis aims to derive an optimized approach…
The $3.5 billion “secret”: how a bias skews S&P 500 option payoffs every month! In this blog post, we tell you how retail and prop traders make money on the options expiration day (OPEX). For investors and traders in the S&P…
When traders think about diversification, they often focus on spreading risk across different stocks, sectors, or asset classes. But few consider the powerful benefits of adding gold strategies to their trading portfolio. Gold has historically behaved differently from equities, bonds,…
The systematic global macro investment style, labeled Macro Momentum, is grounded in economic theory and aims to capitalize on the tendency of market participants to underreact to news by positioning on the basis of fundamental macroeconomic trends. In general, such…
While retail participation in financial markets has surged since the mid-2000s, especially following the 2020 pandemic and events like the 2021 GameStop short squeeze, retail traders often face the daunting challenge of competing with high-frequency trading (HFT) algorithms. Finding proven…
In recent years, the cryptocurrency market has rapidly transformed from a niche innovation into a significant segment of the global financial system. By March 2025, its total market capitalization soared past $3 trillion, with over 100 cryptocurrencies individually exceeding $1…
This post looks into a recent study titled “Does Trend Following Still Work on Stocks?” by Zarattini, Pagani, and Wilcox, which extends the foundational 2005 work by Wilcox and Crittenden. We emphasize that we at QuantifiedStrategies.com have NOT backtested or…
Have you ever wondered if it’s possible to profit from stocks that experience significant one-day drops? New research sheds light on economically significant short-term price reversals, offering insights for traders looking to refine their strategies and potentially achieve substantial returns:…
A study called Market Intraday Momentum by Lei Gao, Yufeng Han, Sophia Li, and Guofo Zhou reveals a significant and consistent pattern in market behavior: intraday momentum. This phenomenon shows that the market’s performance in the first half-hour of trading…
An index rebalance trading strategy is a trading strategy that seeks to exploit the price movements of stocks that are being added to or removed from a major market index. Index funds, which are passively managed funds that track a…
Imbalance trading strategy, also known as order imbalance trading, is a “technical analysis” approach that utilizes the imbalance between buy and sell orders to identify potential trading opportunities. This strategy is based on the premise that large imbalances, especially when…
Since 1993, all the gains in the S&P 500 have come from owning the index from the close to the open the next day. We see the same tendency in the gold markets. Thus, we can develop night trading strategies…
Momentum trading strategies are the practice of buying and selling assets according to the recent strength of price trends. Traders who use the strategy aim to buy securities that have been showing an upward price trend and short-sell securities that…
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…
In May 2015, Micheal A. Gayed published a paper called Lumber: Worth Its Weight in Gold Offense and Defense in Active Portfolio Management (free download at SSRN). We used that paper to make a profitable lumber/gold ratio trading strategy for…
For years, anyone in finance worth their salt could tell you a fundamental truth about stock market patterns: at very short horizons, like one month, stock returns tend to reverse. That meant last month’s losers often became this month’s winners,…
Why do intraday losers pop in the final 30 minutes of the trading session? This article shows you the abnormal returns obtained from buying intraday losers and what might be the reason for this anomaly. Key Takeaways What Is the…
Overnight gaps are a common occurrence in financial markets, driven by news and sentiment shifts outside regular trading hours. But how often do these gaps reverse during the same trading day? What is a gap? In this article, we define…
Artificial intelligence continues to disrupt traditional investing, and one of the more intriguing applications is using large language models (LLMs) to analyze market sentiment. A recent study titled “Does Sentiment Help in Asset Pricing?” explores exactly that. Can we make…
The MACD-histogram trading strategy is a mean-reversion system that identifies momentum changes and reversal points in the stock market. The strategy has generated 6669 trades on a portfolio of 77 ETFs, with long positions better than short positions. Let’s jump…
A carry trade strategy involves borrowing at a low-interest rate currency and converting the borrowed amount into another currency with a higher interest rate to invest in an asset that provides a higher rate of return. If you are active…
High Probability ETF Trading, published in 2009 and written by Larry Connors and Cesar Alvarez, contains some interesting strategies. They are all mean-reverting and tested on the most popular ETFs at the time of writing, which was the end of…
Investors have long studied the post-earnings announcement drift (PEAD) in the stock market, but new research reveals this phenomenon is also alive and well in the corporate bond market—and perhaps even more persistent. We show you a potential corporate bonds…
Making wise investment decisions in today’s erratic financial market may depend on your ability to recognize the signals of a potential market reversal. The phrase “Reversal Day” refers to a day when a stock or market index changes direction, either…
Gaps are some of the most visible and psychologically powerful events on a price chart. When a market opens above the previous day’s high, it feels like something big is about to happen—like a trend is beginning. How often do…
Key takeaways Stochastic trading strategy (Backtest) In this section, we tested the stochastics indicator strategy using two trading styles: short-term mean reversion (overbought/oversold) and %K and %D crossovers. We tried only the S&P 500, and we used the ETF with…
Golden Cross Trading Strategy 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…
Gap trading strategies have been a popular tool for many decades. Gaps vary in size, variations, and volume depending on the asset you are looking at. Gaps can be traded in any instrument, and certain asset classes have substantial daily…
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)…
The Weekend Trend Trader trading strategy is a mechanical and systematic trading system designed for part-time traders, allowing them to make decisions and manage trades during the weekend when markets are closed. In this article, we explain the Weekend Trend…
What if a straightforward strategy could deliver solid returns with less risk? We backtested a simple trading approach using the SPY ETF, which tracks the S&P 500, and the results are compelling. By buying only after a down week and…
Williams %R was developed by the famous trader and tax rebellion Larry Williams, who has given names to several technical indicators. Last week we wrote about the WilliamsVixFix indicator, and today we are explaining the Williams %R trading strategy and…
Earnings seasons, the quarterly periods when companies release financial results, are known for sparking market volatility. Occurring in January, April, July, and October, these seasons are closely watched by investors aiming to capitalize on price movements. But can these periods…
The stock market has been on fire for the last decade, causing the impression that it reached an all-time high almost every day. However, this is only a perception because all-time highs are quite uncommon. Let’s make an all-time high…
In the fast-paced world of financial markets, traders are always seeking new indicators to perform better technical analysis and improve their trading game — one such indicator is the Range Expansion Index (REI). What do you know about this indicator?…
Ascertaining the market condition is often necessary but can be very difficult, which is why the choppiness index can be very powerful for your trading. What do you know about the choppiness index? The Choppiness Index is an indicator created…
Yes, the turtle trading strategy still works today. It is a trend-following strategy, so it works in markets with clear trends. While the original strategy, which is based on identifying breakouts, still works reasonably well, traders have modified the turtle…
What is a market regime indicator? A market regime indicator is a tool or metric used by investors and analysts to categorize or characterize the current state or condition of a financial market. It helps in understanding whether the market…
What are Market Timing Strategies? Plenty of investors try to time the market. Most are unsuccessful due to a number of reasons. Thus, most investors should not time the market. However, most of the failures can be attributed to a…
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…
FOMC meetings can have a significant impact on financial markets as decisions on interest rates made during these meetings can influence the direction of monetary policy and market expectations. Many traders look forward to them and trade the immediate volatility…
One of the most important factors in trading is trading volume, as it represents the amount of buying and selling that goes on. One strategy that makes good use of trading volume is the value area trading strategy. What is…
A commodity trading advisor (CTA) is an individual or organization that provides personalized advice and services related to trading in futures contracts, commodity options, and retail off-exchange forex contracts or swaps. It could also be a fund that uses a…
If you have ever looked at a stock chart, you would know that stock prices often swing about, which is why some people trade the swings for quick profits rather than wait out the inevitable downturns. However, most stocks rise…
You can develop and create profitable short-selling strategies and systems, but you can’t expect to find many; they normally trade infrequently. This article presents several short-selling strategies in the S&P 500 (SPY and ES) and consumer staples (XLP). Moreover, we…
The Ichimoku trading strategy uses a technical analysis indicator that defines support and resistance levels, shows the trend direction, and gauges the momentum of the trend. It does this by plotting multiple averages on the price chart, which forms a…
The 9/30 trading strategy is a trend-following strategy that uses two moving averages — a 9-period EMA (exponential moving average) and a 30-period WMA (weighted moving average) — to spot trading opportunities when there is a pullback. The 9-period EMA…
New traders often think that there is that one indicator that would help them make big profits from the market all the time. Unfortunately, there is none, which is why the triple screen strategy was invented to exploit the strong…
A trader in a losing stock position has only a few options: they can close the trade at a loss and look for opportunities elsewhere; they can hold the losing position for a while and hope that the price will…
Many traders look at the gold and S&P 500 ratio. The ratio can be used to create sector rotation strategies are popular. One of the reasons is the anticipation of better and more efficient capital allocation, and perhaps a second…
The dual momentum trading strategy by Gary Antonacci, what is that about? As the Oracle of Omaha, Warren Buffett, once said: “Trying to time the market is the number one mistake to avoid.” It is almost impossible to consistently time…
Trading securities can be as simple as clicking the buy or sell button on your trading device, and the trade orders get executed. While that may be true for retail trading, it may not be so for institutional trading which…
The higher highs and higher lows pattern signals an uptrend. Is this likely to continue or reverse? In almost all markets, the higher high and higher low pattern signals weak future short-term gains. Unfortunately, it doesn’t work as a short…
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…
The Nasdaq E-mini 100 futures contract is an electronically traded stock market index futures contract based on the Nasdaq 100 index — an index of the largest 100 non-financial companies listed on the Nasdaq stock exchange. The index is primarily…
There are many exponential moving average (EMA) strategies, but the 50 EMA strategy is one of the most commonly used among traders in different financial markets. Let’s take a look at this 50 EMA trading strategy. The 50 EMA strategy…
The moving averages are one of the most used technical indicators in the market. However, there are many types of moving averages. Today we are going to be looking at the exponential moving average: 20 EMA trading strategy. The exponential…
There are some indicators you can easily combine to get the best out of the market. The moving average convergence divergence (MACD) and Bollinger Bands combination is one of the best synergic indicator combinations. You can use it to trade…
The domain of breakout trading strategies opens doors to profit from possible changes in market trends. Breakouts are key indicators of trend shifts, providing traders with chances for financial gain. Our detailed guide will take you through multiple approaches enabling…
There are many indicators and tools for technical analysis, but only a few have leading properties like the Fibonacci tools, which is why Fibonacci trading is popular among traders. But how do you trade a Fibonacci trading strategy? A Fibonacci…
Mean reversion trading strategies involve identifying assets that have deviated significantly from their historical average price or valuation and then betting on their eventual return or “reversion” to that mean level. Traders using mean reversion trading strategies anticipate that prices…
Trend following trading strategies aim to profit from existing market trends. They identify trends using technical analysis tools, enter trades in the direction of the trend, and exit when signs of reversal appear. These strategies focus on momentum, use risk…
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…
Gold Moving Average Strategy and Trend following systems work. Below we present a very simple trend following system in gold: In this article, we look at how you can use the 12-month (250-day) moving average to outperform the gold price. Gold…
The SPY Small Caps Rotation System focuses on investing in small-cap stocks, typically valued between $250 million and $2 billion. This strategy aims to maximize growth by reallocating funds into these stocks during optimal market conditions. In this article, you…
The 200-day moving average trading strategy 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.? …
The 9 EMA trading strategy is a widely used technical analysis indicator strategy among traders to identify short-term market trends. It involves the use of the 9-period exponential moving average to generate buy and sell signals. The strategy is easy…
The MACD and RSI strategy refers to a trading method that makes use of both indicators in analyzing and trading the markets. The combination of both momentum indicators may give more insight into what the market may do next and…
Today we want to delve into John Ehler’s Trading Strategy and an indicator created by this famous author to investigate financial instruments quantitatively. In August 2006, John Ehlers published an article in Stocks & Commodities titled Modeling The Market =…
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…
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…
Backtesting trading strategies refers to the process of evaluating the performance of a trading strategy using historical data to simulate how it would have performed in the past. The steps involved in how to backtest a trading strategy include defining…
NFP reports are known to induce volatility in the financial markets, as well as set the tone for price movements each month. So, it is in your interest as a trader to know how to read the NFP report and…
When stock markets are oversold, we can expect strong returns over the next few days. But in the long term, returns gravitate toward the average returns. Thus, oversold stock markets only predict short-term results, not long-term. We do a backtest…
Here is a Tradingview Pine Script Strategy. TradingView is a popular tool with many traders due to its vast array of tools and features. TradingView uses its native code language, Pine Script, to implement indicators and backtest trading strategies. Here…
Backtested Futures Systems are employed to capitalize on market movements by buying or selling futures contracts. These futures strategies can be broadly categorized into three main types: trend following, mean reversion, and arbitrage. Trend-following strategies involve identifying and riding upward…
Is it correct that copper is a leading indicator for stocks? Can we make a copper vs. stocks strategy? No, copper is most likely not a good leading indicator for stocks. Our copper vs. stocks trading strategy might be due…
In the fast-paced world of semiconductor stocks, the VanEck Semiconductor ETF (SMH) offers a unique gateway to this high-growth sector. However, success in trading SMH isn’t just about market exposure—it’s about precision and strategy, preferably backtested. A robust trading plan…
We have updated all our strategies with equity charts and performance metrics/statistics: Trading strategies for sale. We have also added plenty more futures strategies. All bundles are also updated: If you are a first-time customer, we will give you a…
In the ever-changing world of financial markets, technical indicators may help to make decisions quickly, and one such indicator is the Relative Vigor Index (RVI). What do you know about the indicator? The Relative Vigor Index (RVI) is a technical…
Do you want to trade the Nasdaq 100? We bring you 3 trading strategies to help you get started trading. The strategies are backtested on the ETF with the ticker code QQQ, which tracks the Nasdaq 100. We have not…
When the Federal Reserve announces a rate cut, the financial world often holds its breath. But what does this mean for the stock market, particularly the S&P 500, when the FED makes its first-rate cut? A fascinating chart from Goldman…
Introduced by the ISM in 1948, ISM Manufacturing Index, or PMI, is a useful resource for assessing the health of the US manufacturing sector. It is one of the key macroeconomic indicators financial market traders monitor on economic calendars because…
Machine learning trading strategies can predict market trends and make better trading decisions. This guide explains the essential strategies and techniques to leverage machine learning in trading. Key Takeaways **Top Machine Learning Trading Strategies for Predicting Market Trends** Machine learning…
QQQ – TLT Strategy (With backtest and trading rules) A Bond and Nasdaq 100 trading strategy. This strategy trades the NASDAQ 100 and long-term treasury bonds from the long side, using the ticker codes QQQ and TLT. We include interest…
With trading strategies, there are many different ways to trade and as many different types of trading strategies. It’s important to remember that what works well for one person might not yield the same results for you. Conducting thorough data analysis and data-driven backtesting,…
Compounding in trading involves reinvesting your profits for exponential capital growth over time. This blog post will guide you on how progress compounds in trading and present key strategies for maximizing returns. You’ll learn to set effective goals, develop a…
Are all-time highs in the S&P 500 bullish or bearish? This is a common question among investors when the market hits new peaks. Understanding whether new highs signal continued growth or a potential downturn is crucial. In this article, we’ll…
U.S. credit spreads reflect economic conditions and investment risks. High spreads indicate higher risk and economic uncertainty, while low spreads suggest stability. This article explains what U.S. credit spreads high and low: what does it mean, and how they affect…
Previously I wrote an article about the detrimental effect of using stop-loss. What happens if we reverse it? Does using a profit target create any value? When trading it’s mentally very hard to see a nice gain turn around into…
