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 […]
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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 […]
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 […]
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 […]
26 Stock Market Strategies That Beat Buy And Hold
Profitable stock market strategies are not easy to come by. One proven path is to seek out stock market anomalies. A stock market anomaly is 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 […]
Should You Combine Trading Strategies?
The general advice with trading systems is that you should try to combine multiple trading strategies together in order to get the benefit of diversification. Having a suite of profitable trading algorithms means that you can obtain a smoother drawdown and reduce your chance of having a losing day, week, month, year. However, is it […]
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 […]
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. […]
Testing 3 Simple Divergence Trading Strategies
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 […]
Beware YouTube Trading Videos
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 […]
Simple Volatility Strategy For VXX
I’ve spent the weekend looking into volatility and I stumbled upon a simple but effective volatility strategy. The idea is to go long the VXX ETF when volatility is rising and go short the ETF when volatility is falling. This is the opposite to the usual approach which is to short volatility on sharp rallies. […]
How To Build A Mean Reversion Trading Strategy
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! Introduction The two most popular types of trading strategies are momentum and mean […]
The 100 Best Trading And Investing Books Of All Time
It’s about time I updated my list of best trading books so here is my selection of the 100 greatest trading and investing books of all time. I’ve read (or at least partly read) a lot of these and I’ve tried to put them in some sort of order as well. Not an easy task […]
20 Traps All Traders And Investors Must Avoid
Because financial matters are rarely covered during high school, many people don’t understand the stock market or how to invest their money properly. This means that they are more vulnerable to investment scams. With the growth of the internet, and the current frothy state of global markets, these investment scams are unfortunately all too common. […]
