I’ve been trading options since 2004 💵
I’ve been teaching other traders about options since 2010 👨🏫
I write daily option articles for Barchart and IBD 💸
I’ve traded thousands of options contracts 💰
Here're some biggest lessons I've learned on this journey👀
THREAD 🧵
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MACD Histogram Trading Strategy in 2024 (Rules, Setup, Backtest, Example)
The MACD-histogram trading strategy is a mean-reversion system that identifies momentum changes and reversal points in the stock market. The strategy has generated 6669 trades on a portfolio of 77 ETFs, with long positions better than short positions.
Lets jump right into it. Let’s test a MACD-histogram trading strategy.
We backtest the following trading rules:
* The MACD Histogram bar must have fallen 4 days in a row.
* The fourth latest bar must have been below zero.
* The current close of the ETF must be lower than the day before.
Entry is on the close. The exit is on the first day when the close is higher than the day before.
I think this is a pretty good result. Assuming one can only trade a maximum of ten positions at a time as a portfolio, we get equity curve shown below.
Can the strategy be improved or made different? If you have any suggestions, please comment 👇
#tradingstrategies
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Passive income is the foundation of financial freedom.
Nike announces a workforce adjustment, impacting around 2% of employees – close to 1,700 individuals. The decision aligns with the company's fiscal strategy, aiming to realize cost savings of up to $2 billion. Where do you predict the stock is headed?