In this post, we discuss the US financial sector and we show you an example of a financial services trading strategy. The sector is great for trading due to the high volatility.
We backtest the following trading strategies:
We use the ETF with the ticker code XLF as a proxy for the financial sector.
The first trading strategy we use is based on the monthly trading edge from August 2021. We have changed the criteria slightly, though. We regard the strategy as a volatility strategy and is included in our 3 volatility strategy bundles.
The equity curve for XLF looks like the image shown below.
You can find more info about this trading strategy here:
https://www.quantifiedstrategies.com/financial-services-sector-strategy/