The US stock market has a few 3-day weekends (Long weekends) during a calendar year. Is that a buying opportunity? Do stocks drop or rise before a 3-day weekend? In this article, we backtest the performance of a 3-day weekend. Trading Rules [am4show have=’p2;p3;p58;p59;p130;p138;’ user_error=’Premium Post Access’ guest_error=’Premium Posts’] Stocks tend to rise and go…
Understanding volume and price, and how they can influence the market, is very important in trading. Since volume is the measure of activities in the market, traders can use the information provided to increase the probability of their trades. A great indicator that combines price action and volume is the money flow index. Now, what…
Investors have a variety of options when it comes to investing strategies — Bond vs. Equity, Passive vs. Active, and Value vs. Growth strategy. Here, we focus on the two most popular strategies — Growth Investing and Value Investing. The two methods differ in many ways. Let’s find out: what is best – value or…
Almost ten years ago, we traded (for a few months) and revealed a potentially profitable trading strategy for gold miners. The strategy was based on the ETF with the ticker code GDX. How has the strategy performed since we revealed it? Pretty bad! First strategy – long trades: The trading rules in plain English…
Inverse ETF trading seeks to profit from declining market conditions by allowing investors to short an index or sector. It can be used to hedge against market risk, to trade a bearish bias on a specific sector or index, or as a tactical trading tool. An inverse ETF trading strategy can be useful for investors…
Instrument/asset S&P 500 (SPY) Trading rules The trading rules of the edge read like this (please also backtest yourself – you might find a way to improve it): Three days in a row with lower lows and highs. Results Trading performance if exit after N-days (SPY since inception in 1993): The returns the coming days…
The stock market has been on fire for the last decade, causing the impression that it reached an all-time high almost every day. However, this is only a perception because all-time highs are quite uncommon. Let’s make an all-time high strategy for stocks. The S&P 500 spent less than a tenth of its time at…
Albert Einstein is famous for saying that compounding is the eighth wonder. But is he correct? Yes, to a certain extent, he is correct. Look at the example below: [am4show have=’p2;p3;p58;p59;p130;p138;’ user_error=’Premium Post Access’ guest_error=’Premium Posts’] An example of #compounding and delayed gratification: The chart below shows $XOM and how 10 000 investment compounds with…
Instrument/asset S&P 500 (SPX) Trading rules The trading rules of the edge read like this (please also backtest yourself – you might find a way to improve it): The close sets a new 50-day low of the close; and Close is higher than yesterday’s close; and Today’s volume is the lowest over the last 5…
Is it correct that copper is a leading indicator for stocks? Can we make a copper vs. stocks strategy? No, copper is most likely not a good leading indicator for stocks. Our copper vs. stocks trading strategy might be due to luck or randomness. Traders are always looking for leading indicators that can predict the…
