Oreo – A trader is always looking for strong ideas to increase profits in the hectic financial environment. With so many asset classes, choosing a good trading signal might certainly seem like losing in a sea of contradicting data. Furthermore, most of the traders occasionally even overlook selling methods even while they are learning the buy technique. The problem is creating a diversified trading plan that generates gains in the bearish and bullish markets.
Visit QuantifiedStrategies.com to quantify and backtest several approaches on different asset classes. Our historical database runs several decades back. Ten different trading techniques are offered here, extensively tested to fit your trading portfolio.
By the end of this post, you will have access to ten thoroughly investigated trading strategies replete with backtested outcomes and guidelines and ideas on how to apply them properly. Whether you are new to trading or already a seasoned investor, you may utilize them to confidently negotiate the complexity.
1. uses the Tax Day Strategy.
Overview
Our season consists on the Tax Day Strategy. Every American taxpayer has to file their returns by April 15th at least. Their psychological and emotional reaction to this particular day can in fact influence the general state of the market.
Trading Rules
Purchase: toward the end of March
Sell: first trading session post Tax Day
Action
With an average profit of 1.06%, three times that of random periods, backtesting the S&P 500 exposes sound equity appreciation since 1960. As tax pressure releases, the approach catches the chances presented by possible bullish attitude.
2. The R SI Sell Signal
Overview
Just as crucial as knowing when to buy is knowing when to sell. For the NASDAQ 100, our second approach follows the Relative Strength Index (RSI).
Trading Rules
Buy: The RSI over two days is less than ten.
sell:
It is more than seventy or the closing is more than yesterday’s high.
Action
For almost twenty years now, this modified approach is quite successful as a stock trading tool and does indeed restrict draw downs extremely effectively while adding on profits.
3. Pattern of Dark Cloud Cover Candlesticks
Overview
Our third approach uses the purchase indication of the Dark Cloud Cover candlestick pattern.
Trading Rules
Long: In case a dark cloud cover forms.
Short: Should the closing be higher than the high of yesterday.
Action
Although trading prospects are not yet plentiful enough, backtesting against the S&P 500 ETF (SPY) produces a very equity friendly curve and returns of 10% yearly with the position being invested only one third of the time.
4. Treasury Bonds and the NASDAQ
Overview
With consideration for the significant interest sensitivity of growth equities, this approach hedges NASDAQ 100 against Long Term Treasury Bonds.
Trading Rules
Buy: When some of the nasty technical indicators line both QQQ (NASDAQ) and TLT (Treasury Bonds).
Action
Over a 20 year period, the capital rises from $100,000 to $1.2 million. Its short term drawdowns are modest. Strictly speaking, it is better than buy and hold approach.
5. The Yield Filter for Ten Years Treasury
Overview
Our sixth approach is using 10 Year Treasury Yield as an S&P 500 market filter tool.
Trading Rules
Buy: Should the yield fall below its 15 day exponential moving average.
Sales: Once it rises above.
Action
While obtaining profits comparable to those obtained by buy and hold strategies, this approach totally reduces drawdowns to their maximum. High yields so usually coincide with times when the profits seem to be evident.
6. The Russell 2000 End of Month Strategy
Overview
This approach takes use of Russell 2000 index seasonal trend.
Trading Rules
Long: The month’s final five trading days
Short: The last day of the first trading session for the next month
Action
Although only 28% of the time, this approach has continuously increased wealth since 1987 and beat a buy and hold approach.
7. The worst week of the year approach
Overview
Equity markets are usually difficult in September, which leads to our seventh strategy: shorting the worst week of the year.
Trading Rules
Short: on the third Friday in September the S&P 500
One week later: Cover.
Action
Backtesting points to an average gain of 0.9%, hence this is a good stand alone addition for a trading portfolio.
8. Bitcoin Momentum Strategy
Overview
Using a somewhat basic momentum approach, our eighth strategy centers on Bitcoin.
Trading Rules
Buy: When Bitcoin exceeded the close 25 days ago.
Sell: Should it go below that mark.
Action
With annual returns of 86% on average against 60% for buy and hold strategies, this approach avoids most of the significant drawdowns from the Bitcoin trading.
9. The Rally of Santa Claus
Overview
Our last plan before the big one depends on the Santa Claus Rally in stocks phenomenon.
Trading Rules
On the first Friday following December 14, buy S&P 500.
Sell: On the third day of the fresh year.
Action
Investing only 4% of the time, this approach since 1960 has produced an average gain of 1.34% with shockingly high returns.
10. Williams%R Mean Reversal Strategy
Overview
The last approach uses a mean reverting statistic called the Williams %R indicator.
Trading Rules
Buy when the oscillator indicates it is oversold that is, during weakness.
Sell while on strength that is, when the oscillator reports it is overbought.
Action
From $100,000 to $1.7 million against underperforming buy and holds, NASDAQ 100 backtest shows.
These ten trading techniques offer many distinct approaches you could be able to exploit the special market situations, asset classes, and seasonal patterns. Every approach has been examined to provide a strong basis for some likely returns. Using these techniques can strengthen your trading toolkit and help you to negotiate the complexity of financial markets.
