Statistics don’t care about opinions.
Relative Vigor Indicator
This indicator has worked well for the gold price (GLD), as the chart above indicates.
Gold Momentum Strategy
Are you interested in a strategy that has a low correlation to stocks and still produces decent returns?
Rate of Change (ROC) Strategy
We have backtested and optimized the ROC indicator, also with a small twist to it.
Backtest of the Week
We backtest a weekly gold momentum strategy:
Calculate the 12-week total return for both gold (represented by GLD) and 10-year US Treasuries (IEF).
The Signal: If the 12-week return for both gold and treasuries is positive, you go long on gold.
The Exit: If either return is negative, the strategy dictates moving to cash until the next month-end evaluation.
📊 Results:
🔢 #trades: 66
📈 Avg gain per trade: 2.2%
📊 CAGR (annual returns): 6.2%
✅ Win Rate: 54%
⏱️ Exposure: 36%
⚠️ Max Drawdown: -29%
The Power of a “Boring” ETF Allocation System
Shakeouts and Standouts: The S&P’s Latest Pivot
Is the Tide Finally Turning for Small Caps?
Building Your Own Statistical Arbitrage Strategy from Scratch
Why Simplicity Wins in the Long Run
The Hedge Fund Playbook: 151 Strategies
😵 Behavioral Bias of the Week
Anchoring bias
Anchoring bias in trading often leads to the Martingale bias: to lower the cost price, you use a double down trading strategy. Unfortunately, the market has no memory, so it won’t care about your cost price.
😵 Risk Reward Ratio
The risk-reward ratio is a key tool in investing that compares the potential profit to the potential loss of an investment, guiding investors in evaluating the attractiveness of a trade; ideal ratios are often cited as 1:3.
Strategy Bundles
Did you know that we offer strategy bundles? If you want to dip your toe in the water, this might be the perfect option.
PS: You can buy bundles for a substantial rebate before the 2nd of December (Black Friday sale) - please see the top of the email.
Here is the “beginner” bundle for S&P 500 (SPY), which contains 4 strategies (several years out of sample results):
📊 Results:
📈 Avg gain per trade: 0.7%
📊 CAGR (annual returns): 13%
✅ Win Rate: 74%
⏱️ Exposure: 27%
⚠️ Max Drawdown: -23%
🧠 Quote of the Week
The only controllable variable in any situation is you. Oddly, it's the last one people adjust.
Shane Parrish