The Tuesday Edge

A Research on Tuesdays Trading Performance

Trading Tuesdays

Welcome to another ‘Technical Tuesday’.

Today I’ve got another piece of research that might inspire you to dig deeper. (DYOR don’t rely on my backtesting/research skills!)

After last week’s price action, I got to thinking.

“Tuesday always seems to be strong”

I’m sure not every Tuesday is… but if it’s more than usual, maybe there’s an edge or strategy there somewhere.

Luckily I had a custom tool built for Trading View to test these ideas, so let’s have a look.

First I tested buying on a Tuesday morning just after the opening chop @ 9.45 am EST and then closing 15 minutes before the close at 3:45 pm EST. Basically trying to capture all of Tuesday’s trade

Here were the results from March 2020 until today.

[Tested with 500 shares of SPY, no stops or targets – just a simple strategy]

Awful.

Then I thought that perhaps all the bullish juice was in Tuesday‘s pre-market?

So I decided to test the gap.

Here’s what I tested with my tool:

Long on Mondays, 15 minutes before the close and then closing the trade at the open on Tuesday.

Long: 3.45 pm, Monday
Close: 9.30 am, Tuesday

Here were the results from March 2020 until today. [Same parameters as above]

 

That’s much better!

A nice steady equity curve, good % profit with not horrendous drawdown.

Something to work with?

Remember, this is pretty basic testing. I haven’t accounted for commissions or slippage (and trading at the open will likely give you some slippage, +ve and -ve.) plus history doesn’t always repeat!

But I think it’s reasonable info…

Today, think about how you might be able to use this in your trading.

One method is to combine it with your existing strategies.

For example, if you find yourself long on a day trade going into the close on a Monday, this might convince you to hold overnight.

Or maybe you trade the overnight session.

Leveraging on the historical tendency to see a price gap up Monday – Tuesday could mean you align long on any trades during that overnight session.

There are many ways to look at this…

Reply to this email and let me know what you think.

Advanced Futures Trading Strategies

Today’s resource is a new book just released by Robert Carver (who once joined us as a special guest).

It’s called “Advanced Futures Trading Strategies: 30 fully tested strategies for multiple trading styles and time frames”

I’ve not read it yet so it feels odd recommending it, however, Robert is a really smart trader.

He knows his stuff and his career at one of the largest hedge funds helped him develop a systematic trading approach he uses to this day.

So I’m going out on a limb to recommend it!