(Some personal and random thoughts on day trading (from 2013) – by Oddmund Groette) I love day trading! I have day traded for over twelve years and I still like what I do. Actually, I love it! Day trading is some kind of addictive. I need my daily shot with research and trading. My day…
We have been investing and trading for about 21 years, but not until now have we ever looked at a pivot points trading strategy. We can read a lot about pivot points in certain media magazines and by stock commentators but have seen very little backtesting of any pivot point strategies. Below you find six…
The last trading day of the month offers trading opportunities. This is one of many seasonal trading strategies. Can we make a last trading day of the month trading strategy? The last trading day of the month is a weak day in the stock market – the last trading day of the month is a…
The first day of the month seasonality is strong in most markets. We have previously written about the turn of the month trading strategy, but today we look at the first trading day of the month. The turn of the month includes the end of the month and the first three trading days of the…
In this article, we look at the meaning of scalable and non-scalable professions and careers – scalable vs. non-scalable. What you choose might have a significant impact on your life. The word scalable is in Merriam-Webster defined like this: 1 : capable of being scaled 2 : capable of being easily expanded or upgraded…
Which is more profitable – trading or investing? Who makes more money – traders or investors? The short answer is that you can get rich quickly by short-term trading, but you are more likely to make money by long-term investing. A good trader can make a lot of money, but most traders lose money. Most long-term…
Many traders want to take the leap and go full time. Being a full-time employee while your real passion is trading, can drain your energy. It’s frustrating because your mind is elsewhere: the dream of freedom, independence, and becoming wealthy while you are working from wherever you like. No commuting, no boss, no 9-5 stress….
During my twenty years of trading, I have learned that the best recipe for success is to follow and execute my trading plan. The cost of second-guessing my written trading strategies shows why you need a trading plan. In this article, I provide hard facts about how my second-guessing and discretionary trading reduce my profits….
How to make money day trading doesn’t have an absolute answer. However, How I made money day trading might offer some clues on how you can go about it. Day trading is fast-paced and gives an adrenaline rush. It offers the possibility of making a lot of money in a short amount of time if…
S&P 500 has historically a strong tendency to revert to the mean. I’m looking to find a way to fade the gap. My research has indicated that fading the gap is best after a strong move in either direction. Thus: The high and low divergence day trading strategy Here are the criteria for a reasonable…
I have previously written one article about the possibility of making money in daytrading: Is It Possible To Make Money Day Trading? My numbers July 2012 – July 2013 Is It Possible to Make Money Day Trading? Can you make money day trading? (My numbers) Is It Possible To Make Money Day Trading? Part 2:…
This was a long headline, which probably won’t catch many readers. Anyway, the trading strategy has proven to perform well in the past but in the last years up to 2021, it has been rather flat. In trading, boring is good. The strategy is tested on the ETF with the ticker code XLP. A day…
My experience is that the most boring stocks are the best for day trading. Many day traders are thrill-seekers, which is too bad because I think the best stocks are the most boring. This is a little bit like low volatility factor investing: over many decades the best stocks have proven to be the “boring”…
I had a look at my performance on one of the new strategies I’ve implemented over the summer and fall. Here are the previous first two posts I wrote: Part 1 Part 2 I started trading this strategy live in July with the lowest minimum size I can possibly trade. Now I’m about to put…
This article presents a last-hour trading strategy. This is in practice a momentum strategy. Here is the hypothesis: if SPY rallies from the open until the last hour, can we make money by going long one hour before the close and exiting on the close? This is a “last hour” trading strategy: The momentum day…
In day trading, what are the returns in the first hour, middle of the day, and in the last hour? I have lately broken down the trading day into performance during the first hour, the middle of the day, and the last hour. Previously I have written two articles about when SPY establishes the high…
I have previously written two articles about when SPY sets high and low during the day: Which Trading Hour Is The Best? When Should You Buy And Sell During The Day? At what time of day sets SPY high and low? Intraday high and low in SPY by weekday I’m trying to find something tradeable…
In a previous article, I wrote about when SPY sets a high/low. But is there any difference separated by weekday? Here is the number from January 2010 until the 1st of August 2012: #Number High Low High Low of days First hour First hour Last hour Last hour Monday 119 44 43 29 29 Tuesday…
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…
Three german researchers have written a study called Is Poker a Game of Skill or Chance? A Quasi-Experimental Study. I was made aware of this article in Peter Warrens’s blog (only in Norwegian). I totally agree with the content. Most traders have too much confidence and have too much ego. Overconfidence is a trader’s worst…
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…
At what time of day does SPY/S&P 500 set high and low? How much does SPY move in a day? What is the best time to trade SPY?Let’s find out by doing some backtests. This morning I looked at when SPY makes high and low during the trading day (regular market hours from 0930 to…
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:…
Some days ago I wrote about a new day trading strategy I have implemented. This morning I had a second look at it and decided to test it using some of the stocks I did not pick for my portfolio list. I simply picked 31 random stocks out of the 365 stocks remaining (I had…
Over the last several months I have been looking into a new potential day trading strategy. This one looks into more illiquid stocks and therefore I won’t reveal the strategy: It’s simply not enough volume for many traders to trade the same. So why do I bother to publish it? I would like to show…
Lately, I have done some research trying to develop some new daytrading strategies. I have tested many trading strategies that buy or sell at the open (OPG). The exit has been after two hours or on the close (MOC). An OPG trading strategy limits slippage. Likewise, a MOC trading strategy does the same. In this…
In the long run, one can expect to be rewarded for taking risks. Let’s test a very simple strategy with this in mind. Let’s buy every open down. Every Open Down Trading Strategy If SPY (which is an ETF of S&P 500) opens down, but above -0.45, then go long at the market, vice versa…
I record every trade I make in Excel. I categorize them into short/long, which day of the week, date, where the market opened, how the market performed the day before, how the stock performed the day before, average volume in the ticker, P/L in the ticker, and which strategy. My recommendation is to have a…
When to buy and when to sell a stock determines your profit and loss. But what is more important – when to buy or when to sell? Most traders spend almost all their efforts speculating when to buy a stock. However, when to sell a stock is just as important as when to buy. In…
Trading is very difficult. Not only is it difficult to find profitable strategies, but you also have to overcome slippage and commission costs. Slippage is difficult to estimate. Commissions costs, however, are easy to calculate. Personally, I pay .001 per share in clearing plus ECN rebates and taxes/fees. So far in 2012, I have paid…
What is slippage in trading? Slippage is a hidden cost that is difficult to quantify. It’s the difference between a theoretical price and the price you get in real and live trading. What is slippage in trading? Slippage is the difference between fictional results when testing strategies, and the actual results in real life adjusting…
These days computer and algo trading do most of the volume in the US. Stocks move very fast and at a very thin volume. This creates some nasty challenges for the individual daytrader. Either you have to compete on the same terms as them (or trade with them), or you have to do something different….
I am a Norwegian living in an obscure former Soviet country but are mainly day trading US stocks. Why would I day trade US stocks? In this article, I give you five advantages of US stocks compared to other countries. Why I day trade US stocks There are several reasons. Here I will mention what…
What is rebate trading? The aim of rebate trading is not to actually make money from the movement of the price of the asset (at least not only that), but to receive money from the ECN (Electronic Communication Network). So yes, the headline is correct. It is actually possible to have a net income from…
How to gain a trading edge by knowing yourself is crucial for success in trading. In previous articles, I have written about how to find trading edges in the markets, but in this article, I look at how you can gain a trading edge by knowing yourself. As a trader, you can gain a trading…
