In today’s blog post I take a data mining approach to find a potentially profitable trading strategy based on the movement of US treasury rates.
The idea of this strategy is to find a selection of stocks that respond favourably to a downward price movement in US Treasury yields. Read more »
The idea behind dollar cost averaging is simple. Every month invest a set amount of money into the stock market. When the market is high, you’ll be able to afford fewer shares and when it’s low you’ll be able to buy more shares at a lower price.
Over time, the stock market moves up, your average entry price stays relatively low, and you begin to accumulate a substantial portfolio. Read more »
The uptick rule is a short selling restriction that says you can only short sell a stock on an uptick. In other words, you must wait for a stock to trade a tick higher before you can short it.
This rule was first introduced in 1938 to promote market stability and investor confidence. However, the rule has always had critics and was pulled shortly before the financial crisis in 2007. Read more »
The Hikkake pattern is a simple price action or candlestick pattern that is used to find market turning points.
The pattern is essentially an inside day with a fake breakout and is originally credited to Daniel Chesler CMT. Read more »
This post contains a detailed guide for creating a mean reversion trading strategy.
You will learn what mean reversion is, how to trade it, 10 steps for building a system and a complete example of a mean reversion system.
Let’s get going!
Amibroker is an excellent tool for back testing and can also be set up for automated trading with Interactive Brokers.
The basic infrastructure is to connect Amibroker to the Interactive Brokers Trader Workstation software using the Amibroker IBController plugin as a buffer. Read more »
Members of our research program at Marwood Research will know that I update the program with new trading strategies on a regular basis.
Last month was Vix Trio and this month I have included another new trading system (with source code) called VWAP Pilot. Read more »
Filling the gap is a popular strategy where you buy a stock when it gaps down in the morning and then wait for it to fill the gap.
Many bloggers have written about how good this strategy is. However, there usually isn’t much evidence to support those claims.
I test the strategy on 20 Nasdaq stocks between 2008-2018 and find mixed results after transaction costs. Read more »
Some intraday stock traders say that if they could choose only one technical indicator it would be the VWAP.
I find that VWAP is not necessarily a holy grail and traders disagree with the best way to use it. In the rest of this article, I test two very simple VWAP trading systems and present the results. Read more »
This week we have seen a mini crash in the stock market indexes and an implosion of several short volatility ETNs. Mood in the stock market has quickly turned from exuberance to fear while some investors are ready to ‘buy the dip’.
Conventional wisdom suggests that the best time to buy stocks is when there is blood on the streets. Many suggest that high Vix readings are a good indicator to increase exposure to the market. Read more »
