Trading Strategies
Value Investing: Buying Below Intrinsic Value
Value investing is the practice of paying materially less for a security than a careful estimate of what the underlying business is worth, and the discipline rests on…
Trading Strategies
Trading Strategies
Earnings Season: How to Trade Around Reports
Four times a year, every public company in the United States files a quarterly accounting of its operations, and during the two-to-three week window in which most of…
Trading Strategies
Momentum Trading: Riding the Trend
Momentum trading is the simplest sentence on a trading desk and one of the hardest jobs on a screen: buy what is going up, sell what is going…
Trading Strategies
Sector Rotation: Following the Business Cycle
Sector rotation is the discipline of moving capital across the eleven S&P 500 sectors according to where the economy sits in its cycle. The underlying claim is unglamorous…
Trading Strategies
Pairs Trading: Market-Neutral Strategy
Pairs trading is a strategy that takes a position in the spread between two correlated stocks rather than in either stock individually. The trader goes long one name…
Trading Strategies
Day Trading: What It Really Takes
Eighty percent of day traders lose money in their first year. That number has been replicated in academic studies for twenty years and it has not moved. About…
Trading Strategies
Scalping: Ultra-Short-Term Trading
Scalping is the trade where you fight for nickels and dimes per share, hold for seconds to a few minutes, and put on twenty to fifty positions a…
Trading Strategies
Breakout Trading: When and How to Enter
A breakout happens when price punches through a resistance level or breaks down through a support level that has held the stock for weeks. The supply/demand balance flips.…
Trading Strategies
Mean Reversion Trading
Mean reversion is a property of certain stochastic processes: values that drift away from a long-run central tendency exhibit a measurable pull back toward it. In equity markets,…
Trading Strategies
Swing Trading: Capturing Multi-Day Moves
Swing trading is what most people on a screen actually do, even when they call it something else. Holding period: two days to a few weeks. Not a…
Trading Strategies
Gap Trading Strategies
A gap is a discontinuity in the price series: the open of session t prints at a level meaningfully different from the close of session t-1, with no…