A Trend-Following Strategy for the S&P 500
A simple trend‑following rule—buy the S&P 500 when prices rise and exit when they fall—has endured for decades. A backtest from 1960 to present shows the method generated a 6% annual return while being invested only 65% of the time, delivering a 9% risk‑adjusted return. Its maximum drawdown was 25%, far lower than the 55% seen in a buy‑and‑hold approach. The strategy’s appeal lies in rule‑based discipline, despite a low win rate and frequent whipsaws.
Larry Connors %B Strategy: A Simple Mean Reversion Edge Explained
Larry Connors' %B strategy leverages the Bollinger Bands %B indicator to capture short‑term mean‑reversion moves in stocks that are in a long‑term uptrend. The rule set calls for buying when %B falls below zero, indicating an oversold condition, and exiting...
Last Chance To Lock In $99 For Life
Quantified Strategies, a Substack newsletter offering rule‑based, backtested trading strategies, will raise its annual subscription from $99 to $290 on April 27. Current subscribers can lock in the $99 rate for life by signing up before the deadline. The monthly fee...
Bitcoin Momentum Strategy
A backtest of a simple Bitcoin momentum strategy covering 2015‑2026 shows the model generated 257 trades with an average 2% gain per trade. Each position was held roughly three days, delivering a 44% annualized return and a striking 321% risk‑adjusted...
Bollinger Band Squeeze Trading Strategy
The Bollinger Band Squeeze strategy exploits periods of unusually low volatility, identified by narrowed upper and lower bands, to anticipate large price moves. Traders wait for a breakout beyond the bands, often confirming with volume or momentum, and then enter...
Is The Death Cross The Kiss of Death?
A Death Cross occurs when the 50‑day moving average falls below the 200‑day average, a signal often linked to bearish market expectations. The article backtests the S&P 500 from 1960 onward, finding only 33 Death Cross events with an average...
Price Action and Seasonal Filter Strategy for Bonds
A simple TLT framework blends pure price‑action signals with a seasonal filter, avoiding macro forecasts or Fed‑watching. Backtested over 20 years, the model executed 242 trades, achieving a 69% win ratio, 2.0 profit factor and a 3.3% CAGR unleveraged. Exposure...
Consecutive Down Days Strategy
The article outlines a rules‑based "consecutive down days" strategy that buys stocks after short‑term weakness within a longer‑term uptrend and sells into overbought conditions. Backtests on the semiconductor ETF SMH show 121 trades with a 1.5% average gain, 78% win...
What Is The Turn of The Month Effect In Stocks?
The Turn of the Month (Ultimo) effect is a market anomaly where S&P 500 stocks tend to rise during the last five trading days of a month and the first three days of the next. Following a simple rule—buy at the...
Bollinger Band Breakout Strategy
A backtest of a Bollinger Bands breakout system on the S&P 500 from 1960 to present shows the portfolio rising from roughly $100,000 to $3.68 million. The strategy buys when the close closes above the upper band and sells when it falls...
MACD Histogram Strategy Backtest
A backtest of a MACD‑Histogram trading rule applied to the QQQ ETF from 2000 to 2026 shows the system still performs well after 14 years. The model executed 124 trades, delivering an average 1.3% gain per trade and roughly 6%...
Buy Weakness, Win Big: The 5-Day Low Trading Strategy
The article presents a systematic 5‑day low mean‑reversion strategy for the S&P 500 (SPY) that buys when the price hits its lowest level over the prior five trading days. A backtest from 1993 to present shows 414 trades, 305 winners, and...
One Simple Momentum Strategy Using 4 ETFs
A straightforward momentum rotation across four liquid ETFs—SPY, EEM, TLT and EFA—selects the asset with the strongest 10‑month performance each month. The back‑test delivers an annualized return of 9.2%, a 61% win rate, a 26% maximum drawdown and a profit...
The Rubber Band Strategy
The Rubber Band trading strategy is a mean‑reversion approach that buys when prices are overly depressed and sells when they become excessively extended, typically using Bollinger Bands or Keltner Channels. The authors backtested the method on SPY, QQQ and XLP...
Overnight Edge in SPY: A Simple Close-to-Close Strategy
An overnight edge strategy for the SPDR S&P 500 ETF (SPY) buys at the market close and sells at the next close. A 30‑year backtest (1995‑2025) that includes realistic 0.06 % per‑trade costs shows an average daily gain of 0.25 %, delivering a...
How the VIX Measures Fear - and Why It Matters
The VIX, derived from S&P 500 index‑option prices, serves as the market’s real‑time fear gauge by estimating 30‑day implied volatility. Its asymmetric behavior—spiking sharply on declines and easing gradually in rallies—reflects how quickly investors demand protection. Historical data show the index...
Backtested Bollinger Bands Trading Strategy
The article outlines a backtested Bollinger Bands strategy applied to the S&P 500, using a 1.5‑standard‑deviation lower band to trigger long entries and a strength‑based exit rule. Over 561 trades the system produced an average gain of 0.52% per trade,...
Moving Average Crossover Trading Strategy
The moving average crossover strategy uses a fast and a slow moving average to generate mechanical buy or sell signals when they intersect. Common pairings include 9/21 EMA for short‑term trades, 20/50 SMA for swing trades, and the classic 50/200...
Candlestick Patterns That Actually Work: Ranked by Backtested Performance
A systematic backtest of 75 candlestick patterns on the SPY ETF from February 1993 to the present identified the most profitable signals. The Bearish Engulfing pattern ranked first, while a combined strategy using the five best patterns delivered a net profit...
ISM Purchasing Managers Index (PMI) Trading Strategy For Stocks
The Institute for Supply Management's Purchasing Managers Index (PMI) gauges U.S. manufacturing health, with readings above 50 indicating expansion. A backtest linking PMI to the S&P 500 shows a 7.3% annual return when the index stays above 50, slightly underperforming...
RSI 2 Strategy Explained: Larry Connors’ 2-Period RSI Trading Rules
Larry Connors’ RSI 2 strategy applies a two‑period Relative Strength Index to spot extreme short‑term price moves. The rule set is simple: buy SPY when the RSI 2 falls below 10 and exit when it climbs above 80. A backtest from 1993...
Easter Trading Strategy: Does the Stock Market Rally Before the Holiday?
The Easter trading strategy exploits a seasonal rally that consistently appears on the Thursday before Good Friday, the market’s last trading day of the week. Backtests using the S&P 500 since 1960 show a 0.35% average gain when buying at Wednesday’s...
Momentum Strategy for the S&P 500
An S&P 500 momentum strategy using a 12‑month simple moving average crossover signals long positions when the monthly close rises above the SMA and exits to cash when it falls below. Backtested from 1960 to present, a $100,000 seed would have...
The Supertrend Indicator Backtested
The Supertrend indicator, a volatility‑adjusted trend‑following tool, was backtested on weekly S&P 500 data from 1960 to the present. Using a 10‑period lookback and a multiplier of three, the simple buy‑on‑cross and sell‑on‑cross rules generated a 44.46% gain on a single...
Heikin Ashi Trading Rules And Strategy
Heikin Ashi is a Japanese candlestick variant that averages price data to produce smoother charts, making trend direction clearer. A simple trend‑following rule—buy when the Heikin Ashi close crosses above its open and sell on the opposite crossing—was backtested on...
What Happens To Stocks When Bond Yields Go Down?
The article explains that falling bond yields typically lift stock prices, as lower interest rates make equity cash flows more valuable and shift investor appetite toward riskier assets. A backtest using SPY and TLT from 2003‑2025 shows that going long...
Volatility ATR Bands Trading Strategy Backtest Results
The Volatility ATR Bands strategy leverages dynamic price bands based on the Average True Range to capture short‑term explosive moves while keeping market exposure minimal. Backtested over 26 years on the Nasdaq‑100, it delivered a 12.5% annualized return, outperforming the...
Multi-Timeframe Analysis And Strategy
Multi‑timeframe analysis pairs a higher‑level chart to set market direction with a lower‑level chart to time entries and exits. The approach was backtested on the XLP consumer‑staples ETF, using a 250‑day, 22‑day and three‑day pullback filter, resulting in 316 trades....
Reversal Day Strategy For The Markets
The article outlines a bullish reversal‑day trading model that enters long positions when a lower low coincides with a higher close and the 5‑day RSI falls below 35. Applied to the gold ETF GLD, the backtest shows an average 1.5%...
The IBS Indicator: The Powerful Indicator You Have Never Heard Of
The Internal Bar Strength (IBS) indicator measures a stock’s closing price relative to its daily range, oscillating between 0 and 1. A low IBS suggests the close is near the day’s low (oversold), while a high IBS indicates a close...
Crude Oil Day Trading Strategy
Crude oil’s deep, liquid futures market makes it a prime playground for day traders and systematic strategies. A 2019 study found that the price movement in the first half‑hour of trading (9:30‑10:00 a.m. EST) reliably predicts the final half‑hour (3:30‑4:00 p.m. EST)....
The Risk of Losing Money in the Stock Market
The article examines the probability of losing money in the stock market, showing that short‑term volatility is common but long‑term outcomes are overwhelmingly positive. Data from the S&P 500 reveal that 5% pullbacks happen multiple times a year, 10% corrections every...