3 Days Down Overnight Trading Strategy (S&P 500, Nasdaq, Rules, Performance)

In this post, we explore a simple mean reversion twist in SPY that holds the S&P 500 just one day (from the close to the next day’s open or close). It’s an overnight trading strategy, the lowest-hanging fruit in the stock market .

We backtest the following trading rules:

* SPY must be down three days in a row (from close to close).

* Entry on close on the 3rd down day.

* Exit the next day open.

The equity curve from 1993 for SPY is shown below, which tracks S&P 500, until today (backtest done in Amibroker).

We have a modified version of the strategy explained on our website. Check out how it performs >>

https://www.quantifiedstrategies.com/3-days-down-overnight-trading-strategy/