Two-thirds of the time, the strategy simply remains in the S&P 500 (SPY).
As the S&P 500 sinks in price, the strategy flips to mean reversion mode -- it buys when a moving average goes below a slightly long-term moving average...and sells when it goes above.
That's exactly the opposite of how most use indicators like MACD.
That way you're always buying weakness and selling strength -- again...the total opposite of what the vast majority of books teach. The books will have you buy trend line breakouts or other such pseudoscience.
Examine the chart for yourself to get a feel for what actually works. Sometimes you'll get caught in a position that moves away from you.
The S&P 500 fell 10.6% recently before popping back up the other day. It did the same thing in 2003, only slightly worse: -12.1%. Here's a back test as proof so you know I'm not just whistling Dixie.
A body builder friend of mine once told me the secret to getting really buff.
He said, "Take that giant vat of protein powder and throw it as far away from you as possible. Then eat lots of lean meat and inject steroids." I had a good laugh...because that's the honest, brutal truth of his profession.
Now I've handed you the honest, brutal truth of stock index trading. So you can make better trades than 99% of the guests on CNBC.
By the way, wanna know a little secret? I didn't even program this strategy. The Boss SuperAi did.
Wanna know another secret? I don't use price-based strategies anymore. There are much bigger edges when you get out of the price paradigm.
Like what you may ask?
Disclaimer: The results listed herein are based on hypothetical trades. Plainly speaking, these trades were not actually executed. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under (or over) compensated for the impact, if any, of certain market factors such as lack of liquidity. You may have done better or worse than the results portrayed.