S&P 500 (SMH)
The trading rules of the edge read like this (please also backtest yourself – you might find a way to improve it):
Trading performance if exit after N-days (100 000 and compounding since inception):
The results are surprisingly positive, but there are few trades.
If we exit after 10 days, we get the following equity curve:
The utility sector has taken a major hit over the last couple of weeks. Below is XLU, the ETF that tracks the sector: But as you can see, it’s not the first time it has “collapsed”, but it has caught the headlines. However, it was even worse in October 2022. Let’s look at what happens…
The S&P 500 has shown strong mean reversion tendencies for many decades. One reason for this is the tailwind in the form of 0.04% average return from the close until the next day open, so-called night trading, the lowest hang fruit in the tock market. This article looks at the performance of the overnight session…
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…
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…
There are many kinds of funds, ranging from illiquid private equity funds to highly liquid mutual funds and ETFs that are available to the public. Hedge funds occupy the sweet middle, but what are hedge fund trading strategies? Hedge fund trading strategies are an investment pool contributed by a limited number of private investors and…
A trend reversal is a change in the direction of the price trend of an asset. This change in direction can be to the upside or downside. The trend reversal strategy is any analysis or trading technique a trader uses to identify the end of one trend and the beginning of another. Trend-reversal strategies can…
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