A Pure Price Based Trend Following Strategy

When it comes to learning how to trade, I like to study those who have been in the business a long time, preferably 20 years or more.   So, I was excited to hear that one of the blogs that I follow, Finance Trends Matter, interviewed long time trader and market wizard Vic Sperandeo.

This interview inspired a new strategy, which I will summarize thusly:


  • When the S&P 500 is in an uptrend (20ema > 50ema  AND 100ema > 150ema)
  • Buy at the close of the second consecutive down candle
  • Sell the next day at the close




In the chart above, I have highlighted the profitable occurrences in yellow and the unprofitable events in red.  

Although the results appear impressive, I will need more time to study it before implementing it.   A long term goal of mine is to trade a basket of unique strategies, such as this one, in order to smooth out overall volatility.

 
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