Friday brought the news that some of the world’s biggest banks have been fined $1.2 billion for rigging forex markets. What I find most amazing about this news is not that this fraud has taken place but that it has received almost no attention on social media. The forex markets have been rigged in the […]
Testing The Half Day Reversal Strategy
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 […]
The Truth About Intraday Momentum
A few years ago an interesting paper called Market Intraday Momentum was published which revealed a simple trading edge for the S&P 500 ETF. According to the paper, the first half-hour in the S&P 500 predicts the last half-hour. So if the first half-hour is positive, the last half-hour also tends to be positive. In […]
Top Slicing And Letting Your Winners Run
Watching a trade move swiftly into profit then reverse back can be a painful experience. Psychologically, these are the moments that can cause you to go on ‘tilt’ and abandon your trading plan altogether. When I first started trading I remember jumping on board fast trends in the FTSE only to see them wiped out […]
What Is The Long Term Performance Of Microcap Stocks?
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 […]
Double Top Pattern – Backtest Rules & Results
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. […]
These 3 Charts Pose Difficult Questions For Index Investors
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.
5 Questions You Must Ask Before You Start Trading
Before you start trading it’s important to be prepared for a long road ahead. Even if you’re born with a natural talent you will still face a number of obstacles that you will need to overcome to be successful. 1. Do You Have Enough Capital? Unfortunately the most passionate new traders are often the least […]
Testing 3 Divergence Trading Strategies On Stocks
A reader asked about trading divergence so I thought I would look into it. Searching the web I found many articles that claim divergence trading is an effective way to trade stocks. However, there is very little empirical evidence provided. In this article we test several different divergence strategies and we compare our results to […]
How To 10x Your Momentum Returns
The backbone of personal finance is to save more than you spend and invest the proceeds. The most common advice is to put your money into cheap index funds each month with a simple allocation split. But what if you want to try something more adventurous? Index investing may only provide returns of six or […]
