How do you do overnight trading? Is it possible to make money via overnight trading? Can you make money by owning stocks or indices for just one day? Is overnight trading good? You do overnight trading by buying the close…
What Does A Follow Through Day Mean In Trading? As a stock trader, you may likely have asked this question several times: “How do you identify a stock rally?” That might have been the question that led William J. O’Neil…
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…
What are the worst days of the year for trading stocks? Let’s find out and test from the year 2000. We did a backtest where we optimized the month and trading day to find the WORST trading days for the…
The common belief is that large-cap stocks don’t perform very well because they are already big and they don’t grow at high rates. However, is this true? What is the large-cap effect (factor) trading strategy? In this article, we are…
Gap fill trading strategies are popular among traders, especially when it comes to playing the opening gap of the S&P 500. But what exactly is an opening gap? This article explores the basics of gap trading strategies, focusing on understanding…
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…
Dogs Of The Dow (DOD) Some investment strategies allow you to enjoy maximum dividend income, and Dogs of the Dow is one of such. But what does it really mean and how has it performed lately? Dogs of the Dow…
Bear market strategy refers to the techniques traders and investors use to trade the market during a bear run. They include entry, exit, trade management, and risk management strategies investors use to protect their assets and even make some profits…
What happens in the coming days after a very bad Friday when the stock market goes down? Let’s backtest and find out if we can make any money from it. Friday 22nd of April was a very bad day in…
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…
Why trade the DAX index and a DAX trading strategy? The DAX index is the main equity index in Germany. It’s one of the most popular trading vehicles in the whole world and has a tremendous daily volume. Because of…
Sweden has a vibrant stock market, with many interesting companies like AstraZeneca, Atlas Copco AB, and Ericsson. You can track the performance of the Swedish market with the OMX Stockholm 30 and OMX Stockholm PI indexes. OMX Stockholm PI is…
The financial markets may seem to move randomly, but they actually move in repeating patterns and trends. One indicator traders use to take advantage of the patterns is the fractal indicator. What is it? Fractal Indicator Trading Strategy is the…
Professional traders have their unique ways of trading, but one thing that is common among them is that they do not follow the crowd. They follow their specific trading plans and use their own strategies. But what are professional trading…
Let’s test the strategy Turnaround Tuesday but only in bear markets. Does that work? Turnaround Tuesday is one trading idea that has worked very well for many decades. We have covered it on our website multiple times. We are now…
After decades of relying on fossil fuels to power the economy, there is increasing demand for Clean Energy such as solar, wind, and geothermal power. As the world seeks to transition into a green energy future, many traders now seek…
Penny stocks offer a low entry and often the lure of striking it big. The internet is full of stories about how you can make millions and gain thousands of percent of returns in penny stocks. Is it any reality…
You must have heard the stock market adage: “Buy low and sell high.” It is possibly the most popular slang in stock trading. Buying at the all-time low may be a perfect way to implement the adage, but does it…
You must have heard about fundamental analysis whether you trade stocks, futures, or forex. Many market pros, such as portfolio managers, hedge fund investors, and investment bank professionals, use fundamental analysis. But what the fundamental analysis strategy actually entails? A…
A profitable trading strategy is one that consistently makes money over a reasonable period of time. It is not just enough for a strategy to make some winning trades over a short time because market conditions can change and it…
Here is a trading strategy that are rotating between S&P500 and Treasuries. There exist many strategies that rotate between S&P 500 and Treasuries. Over the weekend we had a look at the white paper of Meb Fabe called A Quantitative…
Spin-offs are a popular corporate action that company management and boards may pursue to unlock value or narrow down their focus. Many famous investors, such as Joel Greenblatt, Seth Klarman, and Charlie Munger, have voiced their support for spin-offs as…
Smoothed moving average (Wilder’s) strategy backtest The smoothed moving average is not as common as other moving average indicators, but you will come across it in your trading journey. So, it’s good to know what it means. Can a smoother…
There are certain trading strategies that you can trade based on price action alone. One of them is the HHLL trading strategy. You may be wondering what the HHLL trading strategy is. Here you go: The HHLL trading strategy is…
There are many kinds of funds, ranging from illiquid private equity funds to highly liquid mutual funds and ETFs that are available to the public. Hedge funds occupy the sweet middle, but what are hedge fund trading strategies? Hedge fund…
There are different ways to skin a cat, they say. This is true in trading as well. While some find their edge in the market with the help of trading indicators, others trade the price action, and the rabbit trail…
We already discussed how to create and backtest a trading strategy using Chat GPT in a prior article and video, but today we are going to skip the idea generation stage and jump right into the trading rules and backtest:…
Equal weight and market weight are two different methods to build an index. The S&P 500 is famously a market-weighted index, like most stock indices. But the question that pops up is: Which type of market weighting performs best –…
Adaptive moving average strategy backtest (Kaufman’s adaptive moving average) We know that traditional moving averages smoothen price series to reduce noise and show the trend. However, when price makes a temporary but significant leap, it can still give the appearance…
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 high-frequency trading strategy is a method of trading that uses powerful computer programs to conduct a large number of trades in fractions of a second. It is a type of algorithmic trading strategy that uses high speeds, high turnover…
Burton Gordon Malkiel in his famous book — A Random Walk Down Wall Street — popularized the random walk model of the financial markets. According to him, the market moves randomly and its direction cannot be predicted with technical or…
Stock and sector rotation is when you switch between different asset classes or stocks. In this case, between different asset classes. We did a backtest involving SPY, TLT, and LQD. It’s a strategy backtested by many and in different ways,…
The Dow Jones Industrial Average is the oldest stock market index in the world. However, it is not as popular as the S&P 500 or the Nasdaq nowadays. But this doesn’t mean it can’t be traded profitably. In this article,…
Fractal adaptive moving average strategy backtest Many new forms of moving averages have been created, but not all of them are easy to calculate. The fractal adaptive moving average is one of those unique moving averages, but it offers great…
“If trading is like chess, then macro trading is like three-dimensional chess. It is just hard to find a great macro trader.” — Paul Tudor Jones. Many of the world’s biggest hedge fund managers and institutional traders focus on macro…
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…
Most price charts are time-based in the sense that a price bar represents price movement over a specified period of time. However, there are other chart types that are not based on time but, rather, on a specified price movement…
This article presents a stock trading system that only trades stocks. It has beaten buy&hold and (10.4% vs 7.5%) with a much lower drawdown. This is the equity curve and the complete trading rules are presented further down in the…
Introduction: Understanding Dumb Money in Trading The term “dumb money” in Dumb Money trading strategy refers to a group of investors who are considered to be less sophisticated or experienced than other participants in the market. These investors may make…
Variable Index Dynamic Average strategy backtest Over the years, chartists have developed indicators to help them analyze the market better. While there are many of these indicators, a few stand out for their usefulness. One of such is the Variable…
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…
In today’s computer-driven, fast-paced market, monitoring the limit order book may help you predict price movements. But what is the limit order book trading strategy? The limit order book trading strategy is based on the order flow. The limit order…
Because of its potential for quick profits, the short-term trading strategy is the most popular trading method among retail traders. Unlike traditional long-term investing methods, this strategy offers an exciting opportunity to profit from relatively minor changes in market conditions….
In a previous article, we highlighted the difference of changing the entry method: entry on the next day open (1) vs. entry on the same day close (2) vs. entry on the next day with a limit order (3). For…
Interested in spread trading? It’s a strategy where traders open opposing positions in related markets, aiming at profits from the price gap. Our article takes you through 12 top strategies for spread trading, covering the essentials and diving into advanced…
Below, you will find backtested and researched trading ideas and analysis. They contain performance metrics, statistics, risks, historical performance, and figures. We do investment research and analysis based on statistics and history for informational and educational purposes. This is factual…
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…
Different order types can result in vastly different outcomes, which is why it is important to understand the type of order you use. If you want your order to be filled at your specified price, go for a limit order….
A small account trading strategy refers to the trading methods and risk management approach a trader can apply to grow a relatively small account. Starting trading with a small account means having to use leverage and making fewer trades. Thus,…
If you have a potential trading strategy, which market are you going to backtest it on? And what do you do if it works on S&P 500 but not so well on Russell 2000? This article uses the same trading…
What does gold trading mean and what about Gold Trading Strategies? Gold, along with crude oil, is one of the world’s most widely traded raw materials. It is undoubtedly the most popular precious metal, both financially and culturally. Gold Trading…
We have put together a “strategy pack” (bundle) of 4 strategies for S&P 500 (SPY). We have not backtested on @ES, but it might work if trading the same opening hours as SPY. Buy and sell orders are backtested…
Considered a part of the technology sector, biotech stocks represent an important part of the Nasdaq market, and they tend to have big growth potential. But what are biotech stocks? Biotech is an industry group that includes companies that research…
Hedge funds employ many investing strategies, and the long-short equity strategy is one of them. But what does this long-short equity strategy mean? Long short equity strategy is a method of investing whereby a trader takes long positions in stocks…
Volatility and bear markets are related: volatility “always” picks up when the market goes down. Is this good or bad for a trader or investor? Should you buy or sell stocks in a volatile market? Let’s find out: Short-term traders…
Mean reversion strategies come with their own set of advantages and disadvantages relative to trend-following strategies. However, just as when implementing a trend-following strategy, knowing the statistical behavior of your asset is of vital importance when it comes to mean…
Here are 20 soft commodities trading strategies you are going to learn. For those trading soft commodities like sugar, cotton, and coffee, a strategic edge is key. This article explores effective soft commodities trading strategies, offering insight into market analysis,…
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…
Market crashes and recessions can be opportunities for long-term investors to buy assets at bargain prices. Market participants call the approach “buying the dip.” But what does it mean to buy the dip? To buy the dip means to purchase…
Some people hold their trades for short periods, even as little as a day, while others hold theirs for quite a long time. While the former is known as short-term traders, the latter are called long-term traders. But what does…
With the world getting increasingly connected online and many regions opening up their financial markets to the global investing community, it is now easier to diversify your investment portfolio into other economies. And the European market is an easy choice…
A pullback trading strategy is a trading strategy that involves buying a stock after it has experienced a recent decline in price. The rationale behind this strategy is that the stock is likely to rebound from its recent decline and…
A Fair Value Gap (FVG) trading strategy involves identifying and capitalizing on price jumps caused by imbalanced buying and selling pressures in the market. These gaps, also known as Price Value Gaps or Singles, occur when the supply of buyers…
Hounds of the Bay is another investment strategy that allows you to enjoy maximum dividend income. But what is Hounds of the Bay all about? Named after the Canadian financial center, the Bay Street, Hounds of the Bay is a…
Globalization has made it possible for investors to tap into investment opportunities around the world, and as the second largest economy in the world, the Chinese stock market provides opportunities. But what is your China trading strategy? You can also…
There are different strategies for trading the market, such as trend following, price action, scalping, momentum, Martingale, mean-reversion, and so on. All are risky, but the Martingale trading strategy is known for its huge risks. What is this strategy and…
Nikkei 225 futures, which is based on the Nikkei 225 stock market average, provide investors around the globe with an efficient way to access the opportunities of the Japanese equity market, one of the world’s largest markets. Created in 1950,…
There are many indicators or patterns that try to predict whether the stock market is going to crash or rise. Today we will be looking at one that generated few signals over the years, but anticipated major bear markets. It’s…
Data-driven trading strategies harness numbers to predict market trends with precision. This article unpacks these strategies, showing you how to analyze and use data to make informed decisions that could help to maximize profits and minimize risks. Explore how to…
Commodity trading strategies involve buying and selling commodities in financial markets based on various analytical methods and market trends to generate profit. Commodity trading is the exchange of various commodities, such as agricultural products, crude oil, natural gas, and metals,…
Of course, companies release their earnings reports every quarter. If you are a short-term trader, you may have wondered whether to buy a stock before or after the release of its earnings report. What is the earnings report trading strategy?…
Meme stocks seem to be on everyone’s mind recently, with constant mentions in market summaries and analyses. These stocks gain traction on social media platforms, such as Reddit and Twitter (please follow us on Twitter), often sparking lively debate. While…
The micro E-mini Nasdaq 100 futures strategy is the method or technique that you can use to trade the micro E-mini Nasdaq 100 futures profitably. Micro E-mini Nasdaq 100 futures are a type of electronically traded Nasdaq 100 futures that…
Volume Profile is a trading indicator that displays the volume traded at different price levels over a specified period of time. It provides valuable insights into the distribution of volume across different price levels, helping traders understand the levels where…
The 5-Day Low of The Range Strategy, with its simple criteria of IBS lower than 0.25 and the close lower than the lowest low of the previous 5 days, has shown remarkable results. Over the period from January 1993 until…
Market breadth indicators provide different information about the stock market in a way that other market indicators do not. But what is the market breadth? Market breadth indicates the total number of stocks that are rising in price relative to…
In this post, we take a look at the Elliot Wave trading strategy. At the end of the article, we present you with an Elliott Wave strategy. In the 1920s and 1930s, stock market analyst, Ralph Nelson Elliott, discovered that…
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…
The advent of electronic trading and the high-frequency trading bot that follows it meant that the financial markets have become too efficient to successfully trade them with discretionary methods. This is why algorithmic trading has been on the rise among…
In the world of finance, Commodities Futures Trading Strategies offer immense opportunities for investors to profit from price fluctuations in various commodities such as oil, gold, wheat, and more. However, to succeed in this dynamic market, it is crucial to…
When the dollar weakens, oil prices often rise, presenting opportunities for astute traders. This article delves into a simple yet effective trading approach based on simultaneous movements in the dollar and oil prices. By understanding this dynamic relationship, investors can…
ETF trading strategies can be a very nice addition to your trading strategy arsenal. This guide breaks down key ETF tactics including trend following, mean reversion, and more, to give you a better understanding of how you can trade ETFs….
With e-minis, the Chicago Mercantile Exchange’s Globex electronic trading platform has made it possible for individuals with less capital to play the futures and commodity markets from around the world. It is one of the most efficient and cost-effective ways…
Understanding volume and price, and how they can influence the market, is very important in trading. Since volume is the measure of activities in the market, traders can use the information provided to increase the probability of their trades. A…
While there are many different indicators used in technical analysis, only a few are deeply rooted in how price action is formed and how institutions, smart money, algorithms, and retail traders combined can give us a hint of how the…
Today we will introduce you to a well-known stock market anomaly – the small-cap effect strategy. Small-cap stocks are one of the types/factors you can invest in and hold in your securities portfolio. Small-cap stocks differ from large- and mid-cap…
The Gold Stocks Strategy, revolving around GDX (Gold Miners), suggests buying if GDX rises by more than 0.1% from open to close and selling short if it rises similarly the day before. With results showcasing profits of 273.27% and 185.97%…
The futures market is exciting because of its good liquidity, and unlike equity day trading, there is no reasonable entry barrier, as you can start with as low as $500. But what exactly are futures? And can you find profitable…
With investors becoming more concerned about their risk-adjusted returns amid bearish and flat market environments, interest in event-driven strategies has gained momentum. But what are event-driven trading strategies? An event-driven strategy is a trading approach that seeks to exploit pricing…
There are different ways to participate in the financial markets, and some of them have been structured to involve just predicting the market direction. One such easy but risky trading method is Nadex trading. Wondering what Nadex trading strategies are?…
The largest economy in Latin America, Brazil has a well-established financial market and is the top investment destination in South America. The country has some of the biggest stock and commodity exchanges in the continent, providing opportunities for day trading…
How have stocks, bonds, and gold performed after options expiration week in August? Let’s backtest and find out: Trading Rules First, let’s backtest the performance of stocks (S&P 500) since 1985. We chose 1985 because it was around this time…
Pair trading strategies with Exchange-Traded Funds (ETFs) are gaining traction among traders seeking to mitigate exposure to market fluctuations. While many traders primarily focus on individual stocks, ETFs offer a diversified approach to trading various segments of the stock market….
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…
It’s a well-known fact that as options expiry day approaches, the biggest-cap stocks with actively traded options tend to witness huge trading volumes (and sometimes increased volatility). In fact, the most important day in stock trading is the expiry day….
Can price action trading strategies leverage market prices effectively to enhance your trading decisions and strategies? By analyzing pure price movements, these strategies help traders anticipate future market trends and pinpoint high-probability trades without relying on complex indicators. This article…
Interest rate trading strategy involves buying or selling financial assets, such as bonds, stocks, and Forex to profit from changes in the benchmark interest rate. The goal of the strategy is to make money from fluctuations in these instruments’ values…
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…
