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…
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…
