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 »
A stock market anomaly is a way to beat the market.
It’s a rate of return or investment strategy that seems to defy the efficient market hypothesis.
Today, most investors agree that markets are fairly efficient even if they don’t believe in the purest form of market efficiency.
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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 »
Last week the guys at Quantifiable Edges presented an interesting trading edge which buys one day pullbacks in the S&P 500 during strong up trends.
The exact rules are described as follows: Read more »
Back in January 2017, Donald Trump had just become President and most pundits were forecasting a year of stock market volatility and interest rate hikes.
As it turned out (despite terrorist attacks, natural disasters and provocative tweets) 2017 finished as one of the least volatile years in history. Read more »
This month, another new trading strategy called Nuggets Of Gold has been included in our research program Marwood Research.
This is a daily, long/short strategy composed of simple rules that is designed to find short-term swing trades. Read more »
30-years ago it was considered irresponsible to use a market timing strategy to try and outperform the S&P 500. In recent years as investors have started to gain increased levels of access to historical data and the tools to develop effective trading models, it might now be considered irresponsible to not use a market timing strategy.
At least that’s what famed investor and gambler Blair Hull believes, and his recent study on building a market timing strategy that predicts future returns, proves exactly that. Read more »
When times are good the economy is strong and everyone has more money to spend. So is there any relationship between consumer spending and the stock market?
A new research paper suggests there is and provides a novel way of measuring consumer spending on a daily basis. Instead of looking at more traditional measures (such as personal income or consumer sentiment) the paper focuses on box office earnings. Read more »