The material sector is considered the primary producer in the supply chain because the companies here provide the raw materials used by other industries. Stocks in this sector tend to do well in a strong economy. However, the sector is…
A big part of a successful trading strategy is seasonal trading. As we are about to see, this is especially true in commodities. Today we will look at a silver seasonal trading strategy where we invest only in the best-performing…
Of the many classifications a stock can have, one of the most significant is relative to its size. It is well known in the market that small caps tend to perform better than large caps, something called the small-cap effect….
I believe experience is the most important asset for any speculator. In this article, I explain why experience matters in trading. It’s simple: the longer you survive, the fitter and stronger you get, and thus more fit to prey on…
S&P 500 trading strategies can sharpen your market understanding. This article delivers straightforward techniques for trend, momentum, and volatility trading, providing the know-how for strategic market engagement. Understand when to enter and exit the market with strategies suited for different…
The real estate industry group, previously stuffed inside the Financials sector, was elevated to a market sector level in 2016, making it the 11th sector in the S&P 500 index. Let’s take a look at the newest addition to the…
One often-mentioned expression in the financial markets is “risk on risk off”. What is it, and can you use it to develop a profitable risk on risk off trading strategy? A risk on risk off trading (RORO) strategy takes advantage…
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…
This Big Down Day Trading Strategy, centered around the SPY ETF, focuses on identifying significant downward movements and capitalizing on them. By analyzing simple variables like the average difference between daily highs and lows over a specific period, we unveil…
Triangular moving average strategy backtest Moving averages are the most common and useful technical indicators in forex trading, owing to their effect in smoothening out price movements and showing the actual direction of the trend. There are various types of…
Stock indexes are widely used as benchmarks for tracking a basket of stocks within a particular sector or segment of the market. Investors use the indexes to assess the overall health of the sector, they compare the performance of their…
In 2022 the bond market experienced the worst drawdown in its history, and since then volatility has been off the charts. It seems like rates are moving like tech stocks did in 2000. Luckily, this can be seen through the…
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…
The 5-Day Low Overnight Trading Strategy focuses on trading the S&P 500 when it opens at a 5-day low but closes higher than its opening price. This strategy involves entering trades at the close and exiting when the market opens…
Triple exponential moving average strategy One of the not-so-common moving average indicators used by traders is the triple exponential moving average (TEMA). It is an important trend indicator used by traders to identify trends more closely than a traditional moving…
Identifying core strengths, weaknesses, opportunities, and threats leads to fact-based analysis, fresh perspectives, and new ideas, which are the benefits of a SWOT analysis. SWOT analysis is a technique for assessing the performance, competition, risk, and potential of a business,…
This article shows a rotation strategy between healthcare stocks and the S&P 500. The trading idea is pretty simple, but it beats the buy and hold of the S&P 500. Moreover, we believe this strategy is more rational than at…
A Russell 2000 Death Cross occurs when the 50-day moving average of the Russell 2000 index crosses below its 200-day moving average. This is often seen as a bearish signal, but a new study by Rob Hanna on his blog…
This article presents a SPY volume trading strategy. Understanding the significance of trading volume in SPY and the S&P 500 ETF is crucial. This article explores the relevance of volume in SPY trading and presents findings from historical data analysis…
Volume-weighted average price strategy backtest Several indicators are used for technical analysis; some of these indicators combine different market data to tell a better story about what the market is doing. The volume-weighted average price (VWAP), which combines both volume…
The Utilities sector is known to outperform the S&P 500 index when there are market downturns, especially during periods of recession. Let’s take a look at the sector and discuss an example of an utilities trading strategy. Utilities trading strategies…
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 world of stock trading is a dynamic and ever-evolving landscape, where traders employ a wide array of strategies to capitalize on market movements. However, sometimes very basic strategies can perform really well. The 5 consecutive higher open trading strategy…
Introducing the “3 Day Low Trading Strategy”! This strategy is based on Larry Connors’ double 7 method and aims to capitalize on the stock market’s mean-reverting tendencies. It involves identifying ETFs that close at a 3-day low and have an…
Zero-lag exponential moving average strategy backtest (ZLEMA) The moving average is no doubt one of the most widely used technical indicators. While there are different traditional types, many variations are being created all the time to improve on the old…
Investors and analysts are always looking for ways to analyze the market, and one method of evaluating the current price of a stock to determine whether it is relatively overpriced or underpriced compared to the average trading price for the…
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…
The utility sector has taken a major hit over the last couple of weeks. Below is XLU, the ETF that tracks the sector: But as you can see, it’s not the first time it has “collapsed”, but it has caught…
Today we’ll present a strategy that we first wrote about some years ago – an article called big moves on Mondays – but we have made a small twist to the strategy. We call the strategy for the Big Reversal…
Below we have a few selected End-Of-Day Trading Strategies. (EOD trading strategies) Since we started writing in 2012 we have presented over 200 free trading strategies, and we present a monthly trading edge for our paying subscribers (which you also…
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…
One of the best edges in the stock market is the overnight edge – the price action from the close until tomorrow’s morning (or close). Is it still working? Can a trend filter improve performance? Empirical evidence – the overnight…
Gold is one of the most famous commodities in the world and is a great diversifier for those trading mainly stocks. However, its price has gone nowhere in the past decade, so we decided to test some strategies and try…
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…
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…
Channel trading can be profitable when used correctly. It can help you to track and speculate on the prevailing market trend, especially if you are a swing trader. But it can also be used in range-bound markets. Both mean-reversion traders…
It’s possible to make Friday Jobs Report trading strategies. One of the most important macro numbers on this planet is the monthly US job report. As a bonus, at the end of this article, we provide you with the code…
Investing in international stocks can be a rewarding venture, offering diversification and access to global opportunities. However, the decision to buy stocks when they are at all-time highs can be met with skepticism. But a question arises: Is it profitable…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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 using the…
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…
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…
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…
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?…
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…
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…
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…
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…
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,…
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…
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…
Stocks can be classified into many types: value vs. growth, profitability vs. investment, developed vs. developing countries, and, of course, large vs. small caps. Today, we present a large cap vs small cap rotation trading strategy. The large-cap vs. small-cap…
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…
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…
Most traders attach trendlines across one swing side of a trend to delineate its direction. But to appreciate the individual price swings within a trend, you may need to have a price channel to see the up-and-down swinging movement of…
TradingView is a financial platform that offers tools for traders to visualize market data, create and share technical analysis, and develop and backtest trading strategies. The platform offers a variety of tools including charting, indicators, drawing tools, and alerts. It…
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…
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…
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….
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….
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…
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…
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…
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…
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…
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…
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 –…
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%…
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…
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…
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:…
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,…
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….
Stock market crash trading strategy. Volatility is a normal thing in the stock market — the prices of individual stocks and market indexes fluctuate all the time. But there are times when volatility is to the extreme, giving rise to…
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…
