A Simple But Profitable Stock Trading System
The chart shows a simple but profitable trading system for stocks. It comes curtesy of Susquehanna International Group. This is one of the major market making and trading groups in the world.
It's a long term system but fits with classic theories about how the market works and it makes perfect sense to me. The only bad thing is that it doesn't have too many trades. A little less than one per year.
Still, the profits are good. The chart shows what the profits were per trade but I'm pretty sure those trades were for less than a full year of trading so the performance would be much higher on an annualized basis.
The point is that we just got a signal. The chart below shows that the system just closed a trade for another profit.
I believe that the technique works because it is buying when the market is panicking and selling when it is calm. This is another way of saying the classic market timing trope. Buy when others are panicking and sell then they are greedy.
Of course, I like the even older saying: When you feel like cryin', you should be buyin'. When you feel like yellin', you should be sellin'!