While browsing Quantpedia I came across another interesting trading strategy called the Half-day Reversal. This is a short-term, mean reversion strategy that buys the worst performing stocks in the S&P 500 and holds them overnight. The indicated performance is 57.7% per annum with a Sharpe ratio of 3.03. These are incredible numbers so let’s put […]
Microcap stocks are great for day traders and swing traders because of their volatility. But I wanted to know how well they perform on longer timeframes. In this article we analyse a decade of performance data to see what you can expect from investing in microcap stocks. Data Preparation To do this analysis we will […]
The double top pattern is a chart formation consisting of two consecutive price peaks that leads to a bearish reversal. For years, traders have claimed that the double top is a high probability short setup. This is because a double top pattern signifies that bulls are having trouble pushing the price past the prior high. […]
As the long term charts on this page show, stock markets can go for lengthy periods with poor returns. Investors should utilise a diversified approach and remember to reinvest dividends.
As a trader you only need one or two good trades to pay for the whole month, sometimes the whole year. You could be treading water for weeks then you catch one big move that pays for all your losses. Because of this, trading books recommend you stay disciplined and wait patiently for only the […]
I rarely watch trading content on YouTube but last week I clicked on a forex video that caught my attention. Soon enough, I had fallen down a rabbit hole. My feed was taken over by trading videos and in between were advertisements for signal services and chat rooms promising quick and easy profits. YouTube has […]
You’re probably aware of how difficult financial trading can be and how much luck plays a role in results. Latest figures from Finance Magnates show that in the year up to August 2017, 76% of CFD traders lost money. As shown by the graphic below, some brokers were better than others: But it gets worse. […]
If you want to backtest trading strategies it’s important to have good quality data. I use Norgate Data for my end of day price quotes and am very happy with the quality and service. However, there are times when I want to scrape stock data from the web. For example, if I want to extract […]
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.
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 […]