Four Down Days In A Row Trading Strategy

Last Updated on January 13, 2022 by Oddmund Groette

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 bar.

Four Down Days In A Row Trading Strategy

Why these rules? I believe you will benefit from buying when the risk premium rises and selling when the risk premium declines. In the long term, you should make money doing this.

Since the 1st of January 2005, this has happened 32 times in SPY. There are 25 winners. The total gain is 13.54%. Not the best strategy around, but quite good, IMO.

I also picked some other ETFs randomly:

Ticker #Fills #Wins Total in %
VEU 28 23 19.04
GDX 43 34 35.07
FXI 31 18 9.66
EWA 35 32 36.66
EEM 36 28 30.99

Pretty good results, if you ask me!

Here is the chart of SPY and the equity chart above:

 

 

 

 

 

 

 

 

 

 

As you can see, the 4 down days in a row strategy works reasonably well.


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