Market Breadth Trading Strategies (Backtest and Examples)

Market breadth indicators provide different information about the stock market in a way that other market indicators do not. But what is the market breadth?

Market breadth indicates the total number of stocks that are rising in price relative to the number of stocks that are falling in price on a given stock exchange. The market breadth is said to be positive when more stocks are advancing than are declining, which suggests that the bulls are in control of the market’s momentum. Likewise, the market breadth is said to be negative if there is a disproportional number of declining securities.