Recently, we completed research that shows moving averages can be used as part of a strategy to find short-term, mean reversion trading opportunities. This may be surprising to some traders because it might seem odd to use a trend-following indicator like MAs in a short-term, mean reversion strategy.
This research was just published in our latest Connors Research Strategy Series Guidebook: Trading Stocks and Options with Moving Averages – A Quantified Approach.
As you will see throughout this Guidebook, the Quantified Moving Average Strategy has had large quantified edges when applied in a systematic manner.
Here is a trade example from Trading Stocks and Options with Moving Averages: A Quantified Approach with a gain of 10.9%.
SPRD – 12/13/2011 to 12/21/2011
Here is another recent trade example from Trading Stocks and Options with Moving Averages: A Quantified Approach with a one-day gain of 7.6%.
SWHC – 08/23/2012 to 08/24/2012
The entry and exits for these examples are fully explained in the strategy guidebook where you will find that and much more.
If you are looking for high probability trading, you’ll want to read this new research in Trading Stocks and Options with Moving Averages – A Quantified Approach.