End of Month Effect, Divergencies, And Alexander Elder Strategies
First, a reminder about our weekly strategy report for stocks, bonds, and gold. We provide you with a relevant weekly trading strategy backtest every week:
Turn of the month trading strategy:
The end of the month and the first days of the new month has been a stable money maker for many decades in the stock market:
Below is the equity curve (what is a good equity curve?) of being long S&P 500 the last five trading days of the month and the first three days of the next month:
The CAGR (annual return) is 7.2% - the same as buy and hold, despite being invested only 33% of the time.
Divergence trading strategy:
A divergence between the price and an indicator is a pretty common signal used by traders to find opportunities in various financial markets, and there are many good trading indicators you can use to identify divergencies. In the article below we backtest a divergence strategy:
Alexander Elder Triple Screen strategy:
Alexander Elder is a pretty famous trading author. We have no idea if he has made any money in trading, but we have backtested a couple of his ideas in his book called Trading For A Living. This was the first trading book we read, in the early 1990s, and it has a special place on our bookshelf.
Below is a few articles related to Mr. Elder:
Random walk trading strategy:
Can you generate robust trading strategies based on random entries?
We do our backtesting in Amibroker:
We regard Amibroker and Tradestation as the best platform for backtesting. You don’t need much coding knowledge to backtest or trade your own trading ideas.
You might want to have a look at our Amibroker course for backtesting and how to trade your strategies automatically:
Additionally, we publish a fresh new trading edge/strategy for our monthly subscribers to our premium service. You get a total of 24 edges/strategies for a 12 month subscription: