Ascertaining the market condition is often necessary but can be very difficult, which is why the choppiness index can be very powerful for your trading. What do you know about the choppiness index? The Choppiness Index is an indicator created…
Gap fill trading strategies are popular among traders, especially when it comes to playing the opening gap of the S&P 500. But what exactly is an opening gap? This article explores the basics of gap trading strategies, focusing on understanding…
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…
Are there any daily seasonalities in the S&P 500? I did some research into SPY, an ETF based on the S&P 500 components and a very good proxy, based average return on which day of the month. To get a…
A pullback trading strategy is a trading strategy that involves buying a stock after it has experienced a recent decline in price. The rationale behind this strategy is that the stock is likely to rebound from its recent decline and…
The 5-Day Low of The Range Strategy, with its simple criteria of IBS lower than 0.25 and the close lower than the lowest low of the previous 5 days, has shown remarkable results. Over the period from January 1993 until…
Because of its potential for quick profits, the short-term trading strategy is the most popular trading method among retail traders. Unlike traditional long-term investing methods, this strategy offers an exciting opportunity to profit from relatively minor changes in market conditions….
One of the most frequently traded futures contracts, the E-mini S&P 500 futures tracks the popular S&P 500 index, which is an index of the 500 biggest stocks in the US stock market. Just as the S&P 500 index is…
An unfilled gap trading strategy happens when all the price action today is either lower than yesterday’s low (gap down) or higher than yesterday’s high (gap up). They are also profitable if we base our buy signals on additional criteria….
As a stock market trader, you must have been conversant with the phrases like a bull, a bull run, and a bull market. Those are phrases used to describe buying sentiment in the market. But what actually does bull market…
Today, we show you the performance data of a quarterly trading strategy that boasts substantially better risk-adjusted returns than buy and hold: Buy and hold returns 7.2%, while our quarterly trading strategy compounds at 9.8% if we adjust for much…
In this article, we will look at one of these traps; why does it happen? Who is responsible for them? Why does it concern you, and can you outsmart it? We show you how you can profit from a bull…
The Bottom Of The Range Trading Strategy is a method for trading stocks or assets. It looks for times when a stock closes near its lowest point of the day and uses a specific formula called the IBS to confirm…
SPY tends to set its daily high and low during the first and last trading hours, which only make up 31% of the trading day. This suggests traders might find good times to enter or exit positions then, especially since…
The Tuesday Reversal Trading Strategy is a method used in the stock market, particularly focusing on the S&P 500 index. It involves observing a consistent pattern of reversal on Tuesdays and implementing trading tactics based on various scenarios, such as…
While you might not have known it by its name, you would have fallen victim to the bear trap, especially if you love “calling the top” of a reversal trade. Have you ever tried entering a short trade thinking the…
The Triple RSI trading strategy is a modified version of the RSI strategy with four key variables, three of which are based on the RSI. It focuses on mean reversion, and the trading rules involve conditions related to RSI readings,…
If you have been following the stock markets around the world, you would be conversant with stock market indexes, such as the S&P 500, DOW 30, NIKKEI 225, DAX 30, STOXX 40, CAC 40, and FTSE 100. Ever wondered about…
The NR7 trading strategy is a narrow-range strategy that is both well-known and popular. If you do a search on the internet, you get multiple hits on the strategy. To our knowledge, the strategy was first developed by Tony Crabel…
With the S&P 500 index rising significantly over the years, the worth of the popular E-mini S&P 500 futures became out of reach to retail traders with small accounts. This prompted CME to create the Micro E-mini S&P 500 index…
The end-of-month effect (also called the Ultimo Effect) is a well-known trading strategy in the stock market. We have covered this anomaly before. Perhaps what is lesser known is that the effect spills over to the first three days of…
Backtests and statistics of five different futures contracts reveal that most of the price action is random throughout the trading day. However, by implementing one or two extra variables, we find some potential trading edges or strategies. Let’s go straight…
The Turnaround Tuesday Trading Strategy The Turnaround Tuesday effect happens from the close of Monday’s trading session until (at least) the close of Tuesday’s trading session. The effect is no myth! Let’s do some backtesting to find what seems to…
Traders and market analysts keep inventing new tools to navigate the ever-changing landscape of financial markets, and one such tool is the CMO Absolute Indicator. What do you know about this indicator? The CMO Absolute indicator is a momentum indicator…
Traders are always seeking better ways to analyze the ever-changing price data in the financial markets, and one indicator that can transform the way you look at price data is the Fisher Transform. What do you know about this indicator?…
While there are many technical analysis indicators available to the trading community, the Negative Volume Index (NVI) is a unique tool for analyzing the financial markets. What do you know about this indicator? Created by Paul Dysart, the Negative Volume…
Analyzing the financial markets and predicting how the market will move next can be a difficult task but can be made a bit easier with the Ease of Movement (EMV) indicator. What do you know about the Ease of Movement…
There are many technical analysis indicators available on many trading platforms for analyzing the markets, and one of them is the market facilitation index (MFI). What do you know about this indicator and how to use it? The market facilitation…
A time series analysis strategy might be helpful for traders. This article discusses practical tips & techniques and the essentials: forming objectives, selecting models, and preparing data for analysis. Whether you’re predicting stock performance or expecting weather changes, we provide…
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…
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…
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…
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…
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…
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…
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…
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…
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…
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…
What is the return during the last hour of trading? A search on the internet reveals that traders should beware the last hour of trading and that volatility picks up. Let’s do some simple “fact-checking” on the S&P 500 and…
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…
Many momentum oscillators tend to turn very positive at the beginning of a major advance and quickly enter the overbought territory or even show bearish divergence while the market is still advancing. The ultimate oscillator is a type of momentum…
