SPY is the ETF for S&P 500 and GLD is the ETF for the gold price. Michael A. Gayed, CFA, presented a SPY/GLD rotation strategy on ritholtz.com in July 2011. SPY is the ETF for S&P 500 and GLD is the ETF for the gold price. Michael A. Gayed has been a portfolio manager for…
Many traders fear a bear market would be really bad for their trading. Is this true? Should you trade during a recession? What does the data say? There are ways to exploit a bear market during a recession. A big part of that is understanding how the market behaves. We have in multiple other articles…
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 (SPY) when both Thursday and Friday were down days. This was one of the first…
ChatGPT has been on everyone’s mind lately. People are discussing how it can improve productivity or help you solve programming bugs. But can ChatGPT be used for backtesting? ChatGPT can be helpful in trading as a tool for analyzing market data, generating trading ideas, and backtesting trading strategies. But it can be tricky to get…
For those who follow social media, you might be aware of the following ratio that has been much discussed lately: Nasdaq100 and Bonds. QQQ/TLT This is the ticker code of the ETFs of Nasdaq 100 (QQQ) and 20(+)-year Treasury Bonds (TLT). The reason for the interest in the ratio is the divergence between the two…
Hedge funds employ many investing strategies, and the long-short equity strategy is one of them. But what does this long-short equity strategy mean? Long short equity strategy is a method of investing whereby a trader takes long positions in stocks that are expected to appreciate and, at the same time, takes short positions in stocks…
When it comes to navigating the complexities of financial markets, one timeless truth stands out: “Statistics don’t care about opinions.” In the dynamic world of trading, opinions can be as diverse as the market itself. Every investor has a unique perspective on the next big move, driven by a combination of intuition, experience, and sometimes,…
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 and I will lift the world for you!” Is this statement also valid for trading?…
Hedge funds are compelling investment vehicles that require considerable investment to operate. Some of the strategies used by hedge fund managers including High Frequency Trading and arbitrage methods are impossible for the average trader to employ because of costs and time restraints. But there are other strategies that hedge fund managers use that average traders…
Asset allocation is the allocation of investments across different classes of assets. In a broad sense, this means a combination of stocks, bonds, various securities and money market instruments. Within these classes, subclasses are also distinguished: Asset allocation strategy (strategies) We have provided several examples of backtested asset allocation strategies. Please click the link below:…
