Gap down trading strategies in stocks are popular and perhaps for good reason. Below is a gap down trading strategy in stocks: Entry: The stock must gap down. That means today’s HIGH must be lower than yesterdays LOW, and Today’s volume must be lower than the average over the last 50 days. This is important….
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 intraday? What is the best time to trade SPY for a day trader?Let’s find out by doing some intraday backtests on the S&P500 (SPY). This morning I looked at when SPY makes high and low during the trading…
Previously I wrote an article about the detrimental effect of using stop-loss. What happens if we reverse it? Does using a profit target create any value? When trading it’s mentally very hard to see a nice gain turn around into a loss. It’s easy to kick yourself for not having used a target. But in…
Trading SPY And S&P 500 Using VIX (VIX Trading Strategies). The VIX is a popular measure of the implied volatility of S&P 500 index options. Put shortly, the VIX is a mean reversion indicator: when the risk premium increases (VIX is rising in value) it might be wise to buy stocks and sell when VIX…
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:…
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…
Some days back I wrote about daily seasonality in the S&P 500. As a proxy, I use SPY, an ETF. As I have been trading for some years I have noticed there is often a reversal on Tuesdays. Actually, this “fact” is well researched over the years. However, I want to measure it myself using…
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 sufficient number of data I started back in 2005. Here are the results: Average…
The Mother of All Bubbles? In January 2009 I wrote an article about the low yield on long-term government bonds. Most of the OECD countries have a yield lower than 1%. That means the real rate is minus (adjusted for inflation)! Most countries have inflation that is higher than 2%. In Switzerland, the expected yield…
