The Simplest Trading Strategy: A Quick Study

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🗣 Stock Market Today: Stock market today: Dow, Nasdaq edge lower to start jobs report week as Powell set to speak

On Monday, US stocks showed mixed performance but maintained a trajectory towards strong monthly and quarterly gains as the market anticipated Federal Reserve Chair Jerome Powell's speech, which is expected to provide clarity on the economic outlook ahead of the crucial monthly jobs report due Friday. The S&P 500 and Nasdaq Composite both dipped slightly by 0.1%, while the Dow Jones Industrial Average fell more robustly by 0.4%. Despite the minor setbacks, the indices are poised to conclude September, traditionally a challenging month for stocks, on a positive note buoyed by the Federal Reserve's substantial interest rate cut and robust signs from the U.S. economy, which have together fostered a rally over the past three weeks.

The stock market is now keenly awaiting the September jobs report, viewed as a critical indicator of the labor market's health and a pivotal moment for evaluating the recent market rally's sustainability. The expectation is to discern the pace at which the labor market is decelerating, gauging if the Federal Reserve's aggressive monetary policies have been protective of a robust economy or a response to economic struggles. Meanwhile, investor sentiment was dampened by a series of profit warnings from major automakers like Stellantis, which saw a significant drop after cutting its margin outlook due to supply chain issues and market weakness in China, affecting other key players in the industry such as General Motors and Ford, which also saw declines.

Stay informed with today's rundown:

Today, we will dive into “The Simplest Trading Strategy: A Quick Study " 👇

Weekends may be boring, at least some times. I decided to share a simple study for those who are into numbers.

What is the simplest trading strategy? I thought the following has a pretty good chance to be the one: "buy and open and sell at the end of the day". Below is a study for the strategy since 2010.

Premium Member Content Piece That You Could Miss:

The Setup

  • $25,000 to trade daily (assuming you would have 25K in margin at least)

  • Trading only $SPY

  • Buy at open using a market order

  • Sell at close using a market order

  • Do not trade on early close days

Simplest trading strategy setup

Since I'm testing the simplest strategy I decided to test a couple of stop loss variations

  • Stop loss 1%

  • Trailing Stop Loss 1%

  • Trailing Stop Loss 2%

...and conditions for entry. Only trade when stock is:

  • Above SMA 100 on daily chart

  • Above SMA 200 on daily chart

The Results

Cumulative gain since Jan 1, 2010

Gain by year (no stop loss)

PS: This post is for fun and educational purposes. Do not trade like this.

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