Statistical arbitrage trading strategy involves buying and selling the same or similar asset in different markets to take advantage of price differences. Thus, arbitrage trading strategies are methods you can use to exploit arbitrage opportunities in any market. This may…
Some signals and indicators try to predict regime changes or future returns in the stock market. One of the most famous is the Breakaway Momentum indicator from Walter Deemer. Another one is the JP Morgan VIX Buy signal. The JP…
Micro E-mini Dow futures strategy refers to the techniques or methods that you can use to trade the micro E-mini Dow futures profitably. Micro E-mini futures are 1/10th the size of their E-mini counterparts. They can be traded electronically on…
Larry Connors is a well-known figure in the world of trading and finance, and he has developed several trading strategies over the years. Larry Connors is a well-known figure in the world of trading and finance. He is an author,…
Usually, timing strategies generate a lot of false signals that cause traders to lose money. To avoid that, today we will look at a strategy that does not generate false signals and can successfully predict the end of a bear…
TikTok is a popular social media platform known for short videos, but it has also become a hub for trading advice and TikTok Trading Strategies. Many traders share their trading strategies and playlist on TikTok, and some have even become…
A leverage trading strategy is a trading strategy that makes use of leverage for the execution of its trades. Financial leverage is the possibility of opening market positions using only a part of the necessary capital. “Give me a lever…
DAX trading strategies refer to various approaches and techniques used by traders and investors to make trading decisions in the context of the DAX index. The DAX (Deutscher Aktienindex) is a stock market index that represents the 30 largest and…
For those who follow social media, you might be aware of the following ratio that is frequently discussed: Nasdaq100 & Treasury Bond Bond relationship. What is it, and is it profitable? In this article, we explain the ratio and we…
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…
Mean reversion trading strategies are still working very well in the stock market, at least in the main indices and the majority of the sectors. Back in 2013, we published a backtest that looked at the performance of S&P 500…
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…
One of the most known factors in investing is momentum. Momentum states that an asset that has been going up is more likely to keep going up in the future than to fall. It has been widely researched by academia…
Junk bonds are probably an asset class that very few traders are involved in. Junk bonds tend to correlate with the stock market, but junk bonds seem to trend more than stocks, which opens possibilities to make uncorrelated junk bond…
Almost ten years ago, we traded (for a few months) and revealed a potentially profitable trading strategy for gold miners. The strategy was based on the ETF with the ticker code GDX. How has the strategy performed since we…
Linear-weighted moving average strategy backtest Moving averages are a technical analysis tool that smooths price data over a specific period. They come in different types, and each type has its advantages and limitations. The linear-weighted moving average is one of…
Let’s look at an interesting and peculiar pattern in GDX – gold miners: We have in many articles mentioned the tailwind from the overnight edge. We use the following trading rules: This strategy has returned the following equity curve: The…
Consumer confidence Index tries to gauge the temperature of the economy. It swings from pessimism to optimism – just like Mr. Market who is rather manic-depressive. In the US it’s made by the Conference board and it casts doom and…
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…
SPX Trading Strategy When it comes to trading the S&P 500 Index, also known as SPX, having a well-defined trading strategy is important for achieving success in the markets. In this article, we will explore what the SPX trading strategy…
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?…
Jim Simons recently stepped back as the chairman of Renaissance Technologies, the asset management group that manages the most profitable fund ever: The Medallion Fund. What are the secrets and trading lessons of the Medallion Fund’s trading strategies? How has…
The potential of intermarket trading strategies is huge, and you get a glimpse of what you can do with our distilled Intermarket Trading Strategies guide. This resource is made for traders aimed at learning insights across equities, bonds, commodities, and…
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…
Orange juice OJ futures strategy refers to the methods and techniques you can use to trade FCOJ futures contracts profitably. Orange juice OJ futures are contracts to receive or deliver the specified quantity of frozen concentrated orange juice on a…
Want to know about the VIX futures trading strategy? Introduced in 2004, VIX futures offers market participants the ability to trade a liquid volatility product based on the VIX Index — an index that measures implied volatility in the U.S….
Want to know how to get started creating trading strategies? This guide will walk you through the essential steps—from basics of trading to defining your own strategy and managing risks. By the end, you’ll be equipped with the knowledge to…
Is it a good idea to buy stocks setting 252-day lows? In this article, we backtest a 252-day low trading strategy for stocks. No, it’s not a good idea to buy stocks that set new 252-day lows. The 252-day low…
Is it smart to buy stocks setting 252-day highs? Let’s backtest a 252-day high trading strategy for stocks. The 252-day high trading strategy for stocks returned 9.6% annually while using, on average, 83% of the capital. 252-day high trading strategy…
Trading commodity futures is one way to diversify your portfolio and explore investment avenues beyond traditional securities, and coffee futures are among the most actively traded soft commodities on the commodity exchanges. To trade coffee futures successfully, you need to…
This article shows you how to short retail investors’ favorite stocks. Is it possible to make money shorting stocks? It is, albeit it’s very difficult. In the context of a bear market, where stock prices can rapidly decline and volatility…
The XLK/XLU ratio is the XLK ETF price divided by the XLU ETF price. It is often used to read market sentiment. A rising XLK/XLU is considered bullish, while a falling ratio is considered bearish. In this article, we backtest…
The S&P 500 is the most followed index in the world. As such, it catches a lot of attention when it is up for many weeks in a row. But how does it perform after being up for eight consecutive…
For more than 7000 years, cotton has been one of the raw materials used in the production of textiles and other fiber-requiring materials including fishnets and gunpowder. In fact, its use continues to increase and now accounts for over 35%…
An article about VIX trading strategies and explaining: what is the VIX and how does it work? The VIX is a fear index and shows the price you need to pay to get insurance in the stock market. In this…
Stock and sector rotation is when you switch between different asset classes or stocks. In this article, we look at different types of stock and sector rotations and why they make sense. In the stock market, we have momentum and…
Pivot point trading strategies involve using key support and resistance levels calculated from previous market data to determine potential entry and exit points for trades. We have been investing and trading for about 21 years, but not until now have…
Trend following the S&P 500 is probably not the sexiest thing to do. Back in 2012 Meb Faber published a paper called A Quantitative Approach To Tactical Asset Allocation in the Journal of Wealth Management. Meb Faber found the 200-day…
What happens when SPY is down 4 days in a row? Let’s test 4 down days in a row trading strategy. Entry is on the close and exit is on the first day with a close higher than the previous…
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 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. Lets jump…
Larry Connors and Cesar Alvarez revealed a trading strategy called Double Seven in their book Short Term Trading Strategies That Work. This is a fairly simple system that at the time worked very well among a wide range of ETFs….
This Every Open Down Trading Strategy, tested with ETF SPY (representing the S&P 500), operates on a basic principle: buying when the market opens down and selling at the close, with specific criteria guiding entry and exit points. The simplicity…
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…
This S&P 500 Reversal Trading Strategy offers a structured approach to potentially profit from market reversals, emphasizing the importance of meticulous testing and adaptability in the dynamic world of trading. Mondays and Fridays often bring about significant reversals in the…
Volatility trading strategies can be very profitable. As an example, we show you an equity curve that only trades when volatility is above what is “normal”. We use a 200-day moving average as a filter for when we want to…
Discovering profitable trading strategies can be both exciting and challenging. One such strategy, known as the Overnight Reversal Strategy, focuses on capitalizing on potential market reversals that occur specifically on Mondays and Tuesdays. By analyzing historical market data, this article…
In a previous article, we presented an S&P 500 and gold rotation strategy. Today we test a sector rotation strategy between S&P 500 and gold miners. Let’s call the strategy an S&P 500 and gold miners rotation strategy. The logic…
Introducing the “3 Days Down Overnight Trading Strategy”: This strategy focuses on the S&P 500 index, tracking its movements over a three-day period. If the index closes lower for three consecutive days, a trade is entered at the close of…
The winter period, October to May, has historically been a very good period for US stocks for many decades. What is the country ETF performance per quarter? How has the stock market in other countries performed? This article looks at…
SPY is very mean revertive and RSI is a mean revertive indicator. Does this mean that RSI works on SPY? In this article, we test an RSI SPY trading strategy. It turns out that our hypothesis is correct: the RSI…
Thursday last week, the 4th of November 2021, was the fourth day in a row with a higher close than the previous close in the S&P 500. How often does this happen? Let’s test on the ETF SPY since its…
XLP Trading Strategies focus on mean-reverting assets, such as the XLP ETF, using the Internal Bar Strength (IBS) indicator. The strategy involves entering trades based on specific criteria, including low IBS values from yesterday and today, as well as RSI(5)…
What are the Donchian Channels and do they work on stocks? The Donchian Channels were invented by Richard Donchian decades ago. They are still a popular tool for traders, but the markets have changed a lot since Donchian’s invention. The…
You are going to learn Nasdaq trading strategies (Backtested) as well as how to apply them effectively. Investors often ask this while seeking to achieve better returns. Our guide strips away the complexity, offering you practical insight into the three…
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…
Below is a potential short strategy in the S&P 500: Short= C>Ref(C,-1) AND Ref(C,-1)>Ref(C,-2) AND Ref(C,-2)>Ref(C,-3) AND ADX(5)>35 AND RSI(2)>90 Description: If the close is higher for the third time in a row, 5 day ADX is bigger than 35…
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 failed bounce trading strategy: Rob Hanna at Quantifiable Edges had an interesting article some days ago about bounces in the S&P 500. Let’s test his idea and turn it into a testable hypothesis: (This article was first published in…
Below is a trading strategy backtested on SPY or the S&P 500: The classical mean reversion strategy in the S&P 500 In plain English the strategy reads like this: Trading Rules The equity curve since January 2000 looks like this…
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 the ticker…
(Source) The crypto and forex markets share some similarities, but they also have significant differences. Both markets function on supply and demand economics, and trades are conducted electronically on the Internet. The crypto market is known for its unpredictable changes…
