TLT vs SPY – Bond Rotation Strategy – (Monthly Momentum Strategy In S&P 500 and Treasury Bonds)

TLT vs SPY – Bond Rotation Strategy. Some days ago we published an ETF rotation strategy that rotates between SPY, TLT, and EEM based on monthly momentum. Today we look at a similar ETF sector momentum/rotation strategy but we exclude EEM: A SPY and TLT strategy (S&P 500 and 20 years Treasury bond). The SPY…

Utilities Sector Trading Strategy (Backtest And Example)

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. What is the S&P Utilities sector? The S&P 500 Utilities sector consists of those companies included in the…

Trading Guide

This page contains articles and posts that cover more general topics of trading. Trading-related articles: What are quantified strategies? (Including a trading strategy) How to become a successful quant trader (Can you be a quant?) How to avoid or minimize strategies stop working How and when should you exit a trade? 5 methods to exit…

Pullback Trading Strategy In The S&P 500 for Long-Term

Pullback Trading Strategy. We have previously discussed and written why the 200-day moving average works: because you play defense if a severe recession hits. But can you combine a long-term defensive trend-following strategy using the 200-day moving average with a long-term pullback trading strategy? In this article, we backtest a combination of a long-term trend…

ETF Trading Strategies

One of the most ideal investment vehicles for beginner investors, ETFs have grown in popularity since they emerged on the financial markets. But what is an ETF, and how is it traded? An exchange-traded fund (ETF) is a basket of securities that is traded as a single instrument, which you can buy or sell through…

Pair Trade Strategy In Liquid ETFs (Pairs Trading with ETFs) (Formula, Backtest and Example)

Pair Trade Strategy In Liquid ETFs (Pairs Trading with ETFs) (Formula, Backtest and Example)

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…

How Likely Are You To Go Broke As Retired Or FIRE? (Sequence Risk, Diversification, And Withdrawal Rate)

This article looks at how likely you are to go broke as retired or FIRE. Low interest rates make many pensioners and those who retire early (FIRE) allocate more and more capital to risky stocks. Many tend to forget that a bear market can last for a decade – even longer. What happens to the…

Higher Highs And Higher Lows Pattern (Trading Strategy)

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 strategy. The higher highs and higher lows pattern The pattern is pretty self-explanatory, but let’s…

Dollar Cost Averaging vs. Lump Sum Investing Backtest – Sequence Of Return Risk (Luck, Skill, Or Magic?)

Most investors and traders are aware of the differences between dollar-cost averaging vs lump sum investing. But what role do luck and randomness play in determining the best strategy – dollar-cost averaging or lump sum investing? In this article, we dig a bit deeper and turn the returns over the last twenty years upside down…

Market Breadth Trading Strategies – What Is It? (Market Breadth and Traders)

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 the number of stocks that are falling in price on a given stock exchange. The…

Nasdaq-100 Index Trading Strategies – What is it? (Nasdaq-100 and Traders)

The Nasdaq-100 index is one of the most followed stock indexes around the globe. But what exactly is it? The Nasdaq-100 is a stock index that tracks 100 of the largest domestic and international non-financial companies listed on the Nasdaq stock exchange based on market capitalization and other factors. It is one of the world’s…

Crude Oil Trading Strategies – What is it? (Crude Oil and Traders)

Many traders are interested in trading crude oil because of its unique position within the world’s economic and political systems. But what exactly does crude oil trading mean? Crude oil trading is the buying and selling of crude oil with the aim of making a profit. This is done via futures, options, or CFD contracts,…

Commodity Trading Strategies – What is it? (Commodities and Traders)

We depend on different commodities to power the global economy. No one nation or entity has all the commodities, which is why commodities are traded across the world. But what is commodity trading strategy, and how is it done?? Commodity trading is the exchange of various commodities, such as agricultural products, crude oil, natural gas,…

Opening Range Breakout Strategy- What Is 5 minute ORB Trading System- Does It Work? (Day trading, Backtest, Daily, And Weekly)

Opening range breakout trading strategies are popular strategies, perhaps because of Tony Crabel’s classical trading book published in 1990: Day trading With Short Term Price Patterns And Opening Range Breakout. 31 years after it was published we still see an abundance of opening range breakout strategies on the internet. But do opening range breakouts work?…

SWOT Trading Strategy — What Is It? (Backtest And Example)

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, a product line, an industry, or any other entity. Stock market analysts and traders can…

Unfilled Gap In Trading? – (Gap Up Gap Down) | Backtest And Strategies

What is an unfilled gap in trading? There are many traders trading solely on gaps because most of the time a gap up or down means increased volatility, and this equals more prey for good traders. In this article, we look at some statistics about unfilled gaps. Is it possible to make money in trading…

Buy And Hold Vs Market Timing (Can You Time Stock Investments?)

Buy and hold vs market timing is a widely debated theme in the stock market. There are numerous articles on the internet arguing the futility of timing long-term investments. We decided to do some tests ourselves by removing just a few observations from the datasets to see what happens to the long-term compounding: Buy and…

Trading Journal Example – How To Make One (Including Spreadsheet)

This article provides you with a downloadable trading journal example. A trading journal (or trading log) is a great tool for any aspiring trader. We recommend writing down all your trades in a database after each trading day. This article describes what a trading journal is, why they are useful, how you create one, what…

What Happens To Stocks When Interest Rates Go Up? (Trading Strategy Backtest)

The cornerstone of the financial theory says that the higher the interest rates, the less attractive it is to own risky assets like stocks, gold, and Bitcoin. In this article, we do a backtest to look at what happens to stocks when interest rates go up. . What happens to stocks when interest rates go…

Why Arithmetic And Geometric Averages Differ In Trading And Investing (Position Sizing And The Kelly Criterion)

The arithmetic vs geometric averages can be difficult to grasp. Albert Einstein is famous for saying that compounding is the eighth wonder. But what if he is wrong? Perhaps multiplicative compounding is the most destructive force in the universe? The sequence of returns and the different alternative paths ultimately determine your geometrical average which might…