In this article I look at some interesting new research from Haoyu Xu that can be useful for both momentum investors and reversal traders.
The research finds that morning returns positively predict next month returns (momentum) while afternoon returns negatively predict next month returns (reversals). Read more »
Blair Hull is a legend of Wall Street and a former professional blackjack player. He was named by Worth magazine as one of Wall Street’s 25 smartest players and by Forbes magazine as one of the most successful traders of the last 40 years.
Today, Hull operates a number of ventures including an ETF that attempts to time the S&P 500 through a mix of 12 technical and fundamental indicators. In this article, we will look at the idea behind Blair Hull’s strategy and the 12 indicators he uses. Read more »
The 200 day moving average is an extremely popular indicator among traders and trend followers. When a stock is above the 200 day MA, it’s said to be in an uptrend and when it’s below, it’s said to be in a downtrend.
In this article I look at a strategy that buys upward trending stocks as they pull back towards the 200 day moving average line. I test the signal on S&P 500 stocks back to 2000 but I find no real edge to this signal on it’s own. Read more »
Last week I received an email courtesy of the StockTwits newsletter with the headline ‘This Market Is Confusing Everyone’.
Apparently, because the market has fallen, gone up, and then fallen again (in the space of a few days) investors are totally confused and the market is ‘faking out everyone’. Read more »
The stock market cannot go up forever. At some point there will be another stock market crash and as always there will be some winners and some losers.
In this article, I look at some techniques investors can use during a market crash and reveal two interesting strategies based on a recent academic paper. Read more »
I have just included a new trading system called ETF Pullbacks for the course Hedge Fund Trading Systems Part Two.
This is a very simple mean reversion system with a high win rate of over 70% and an average trade duration of 7 days. Read more »
In this article I will show that there is the possibility of a profitable edge when trading breakout stocks on high volume days.
However, the edge requires an ability to foresee such high volume in advance. This is no easy task but the data suggests it could be an interesting line for future research. Read more »
Warren Buffett is an example of someone who recognises the importance of reading. It’s been said that he spends 80% of his day reading and thinking and can read up to 600 – 1,000 pages a day.
As a system trader it is also important to read and to keep on top of new developments in the industry. However, doing so is difficult because of the vast amount of information that is produced daily. Read more »
In this article I look at some of the ramifications of the upcoming UK election for financial markets. This is likely to be a less volatile event than Brexit.
If the Conservatives don’t get a 50-seat majority, there is downside for the pound. But it would take a shock result to eject GBPUSD from its recent range. Read more »
The concept of trend following is based on the belief that security prices move in upwards or downward trends over time and that the surest way to profit from those moves is to attempt to ride those trends.
Despite some claims that trend following is a strategy for nonconformists, trend following is in fact hugely popular, particularly among retail investors. Read more »