When Both Thursdays And Fridays Are Down In SPY (S&P 500 Reversal Trading Strategy)

Mondays and Fridays often turn out to be reversals when they move hard either way. Today, we look at a reversal strategy that happens on Fridays. The results are very good with an average gain of 0.77% per trade. (This article was originally published in June 2013. We updated the backtest on our Substack service.)…

Big Moves On Mondays

Big Moves On Mondays

I caught some ideas from Paststat and Quantifiable edges to test “big” movement on Mondays. I have tested this in a previous post, but this time we’ll look at what happens to SPY the rest of the week. Here are the criteria for long: Today is Monday Calculate a 25 day average of the daily…

When XLP Diverges From Recent High And Low: A Mean Reversion Trading Strategy

A while back I wrote about a day trading strategy in SPY. This one works pretty well on XLP as well, with some modifications: The high and low divergence mean reversion trading strategy The strategy is like this in plain English: Calculate a 25 day average of the (High minus Low – (H-L)). That is…

GDX Trading Strategy – The Greatest Gold Stock System You Should Trade

GDX Trading Strategy – The Greatest Gold Stock System You Should Trade

Jay Kaeppel wrote an interesting post about gold stocks: The greatest gold stock system you’ll probably never use. I have a twist to this system which I’ve been trading for some weeks. Since Kaeppel has published it I might as well publish it myself. And it’s so simple and the results are so astonishing I…

4 Overnight Trading Strategies In The S&P 500 (Night Strategies From Close To Open)

The overnight edge in the stock market is well documented: By using the tailwind from the close until the next open, you can develop some good short-term trading strategies. In this article, I present 4 overnight trading strategies in the S&P 500. The strategies buy at the close and sell the next day’s open. Because…

Is Trend Following Dead (again)? Or Just The Normal Out-Of-Favor Cycle?

Is Trend Following Dead (again)? Or Just The Normal Out-Of-Favor Cycle?

On the internet and in the blogosphere there are a lot of articles saying trend following is dead. The reason is as usual due to lack of returns over some period of time. Is trend-following dead (again)? Or is this just the normal out-of-favor cycle that shakes out many managers before trend-following starts working (again)?…

5 Day Low and Gap Down

Yesterday (on the 23rd) SPY closed below the previous day’s 5 day low. Even more, SPY gapped down and never traded over the previous day’s low. Some days back I wrote an article about a possible strategy to buy SPY when it closed below the previous day’s 5 day low. That strategy is in my…

When SPY/S&P 500 Closes In the Bottom of Today’s Range (IBS)

Mean reversion strategies work well in the stock market. One of the best indicators for such strategies is the Internal Bar Strength Indicator (IBS): (HIGH-CLOSE)/(HIGH-LOW) This simple formula increases the odds a lot, in my experience, for mean-revertive assets like stocks and stock indices. Here is an example: Enter at close if the above formula is…

Gap Fill Trading Strategies – Opening Gaps in The SPY and S&P 500 | Gap Trading Systems [Backtest]

Searching on the internet you can find a lot of articles on how to play the opening gap of the S&P 500. Gap trading strategies are popular. What is an opening gap? (Gap Fill) A gap is when the opening price (or print) is higher or lower than the previous close. A gap up indicates…

How Important Are The Best Days Compared To Total Profits?

How important are the best days compared to total profits? In trading, you want to avoid negatively skewed trading strategies. These are strategies that have fat left tails and might wipe out all your profits from many trades. You need to understand the distribution of your expected profits and losses. Below is my profit distribution:…

The Trend Is Not Your Friend In SPY/S&P 500 (and other stock indices)

The Trend Is Not Your Friend In SPY/S&P 500 (and other stock indices)

I guess most traders have heard that “the trend is your friend“. Personally, I don’t do trend-following strategies, I go the opposite way: buy weakness and sell strength – mean reversion strategies. However, this depends on the instrument you trade and of course on the time frame in trading. In general, most currencies and commodities…