Simple technical analysis is of limited use to long-term investors. Momentum can last for a long time but it doesn’t have much predictive ability on a five or ten year time horizon. Likewise, indicators like moving averages or RSI are best suited for shorter-term trading. With that said, you don’t know until you test. So in […]
Stocks
Is The Biden Trade Priced In?
It’s not long to go until the US election and Joe Biden is leading the polls. The prominent 538 blog puts Biden’s chances at around 85%, The Economist has Biden at 90% and betting odds suggest a figure around 68%. As we move closer to the election, and with some votes already been cast, it does […]
How To Use Stop Losses And Profit Targets
I started writing this post last week. The idea was to run a large-scale optimization to see which profit targets and stop losses work best when trading US stocks (similar to the article I wrote on trailing stops). I wanted to find out if it’s better to use a tight profit target or a loose […]
Should You Buy Oversold Stocks? (Waterfall Pattern)
In order to make a profit in stocks you need to sell at a higher price than you purchased. Because of this, many traders look for stocks that have dropped to extremely oversold levels in the hope that they will bounce back from their low levels. One such pattern traders look for is known as […]
Which Trailing Stop Is The Best?
Trailing stops are a simple way to exit a trade. The idea is you buy a stock and then trail your stop loss a little way below it as the trade goes on. This way you can let the trend continue in your favor but lock in your profits once the stock turns round. The […]
Should You Buy Low Priced Stocks?
Some investors believe that lower price stocks produce better investment returns than higher priced stocks. It’s always tempting to look at stocks trading under $10 in the hope of finding a ten or twenty bagger. In some ways this makes sense. Higher priced stocks are often larger and more mature businesses that grow more slowly. Low […]
How Do Stocks Perform After Stock Splits?
There has been a lot of discussion recently regarding the impact of stock splits. With two of the biggest names (Apple and Tesla) announcing splits you might be wondering about their significance. Especially since both stocks have already run up a huge amount since March. In theory, a stock split does nothing to change the […]
Technical Analysis For Stocks Essential Guide
Technical analysis is a method used to predict financial markets that relies on analyzing price charts and patterns. This is contrary to fundamental analysis which relies on economic and business information like interest rates or earnings. Technical analysis is a highly debated subject because academics say that markets are too efficient to be predicted by […]
Q2 Portfolio Update For ZTM
Let’s do a quick update for the ZTM portfolio. If you’ll remember, this is a portfolio I started back in February 2019 to show that anyone can go from zero to a million dollars in the stock market. The idea is to invest a small amount each month into one or two quality stocks. I […]
Should You Invest In Dividend Aristocrats?
Dividend Aristocrats are stocks from the S&P 500 that have managed to increase their dividends for 25 consecutive years or more. They are typically large, blue-chip companies with a market cap of at least $3 billion. One example of a Dividend Aristocrat is Johnson & Johnson (JNJ) which has 57 years of consecutive dividend increases. […]
The Problem With PE Ratios
One of the biggest mistakes I see new investors make is their use of the PE ratio. The ubiquitous P/E ratio is typically the first metric investors learn on their journey towards financial freedom. But the P/E ratio has some significant drawbacks that you should be aware of. 1. Price is not a good measure […]
Testing Turnaround Tuesday
After a big move on a Monday you will often hear traders talk about turnaround Tuesday. The concept is very simple. When markets start the week in a big way, they will often settle down on Tuesday and put in a decent reversal. Looking at the data, we find that there is a small edge […]
Will The S&P 500 Retest Its Low?
March 2020 saw one of the quickest bear markets in history as coronavirus shook the world and the S&P 500 dropped 34% in about five weeks. Since then, the market has reversed and rallied about 24% from its low meaning it’s now down only 19% from the February peak. The market is now trading at […]
When To Buy The Coronavirus Sell-Off
The fallout from the coronavirus has been rapid. The last few weeks have seen huge levels of volatility and the S&P 500 has dropped around 29% from it’s February peak. If you have read any of my previous updates you will know that I have been waiting for an opportunity like this for some time. […]
Performance Of Our Trading Systems In 2019
One of the main reasons why I started Marwood Research is so I have a place to store all of my trading systems. Uploading them online means I can now look back and see how they have performed since they were published. Being able to evaluate the systems on new, unseen data is really important […]
