The effect in the stockmarket is known as the Turnaround Tuesday, therefore traders can shop at a bear market on Monday evening.
The market fluctuates constantly. For most traders what happens on the stock market every day is unstable and unpredictable. Human psychology has been the same for thousands of years. In some cases we are fearful and when the situation worsens we will panic. Today’s stock market is the same, when prices fall and collapse, investors panic and sell stocks.
The Turnaround Tuesday strategy focuses on this fear of loss. Clever traders can thus gain a statistical advantage that takes advantage of the ignorance and emotional fear and helplessness of the operational market participants. This strategy works optimally in falling stock markets and particularly well in crash situations, i.e. when the fear of losses is greatest and many investors find it difficult to keep a cool head.
To benefit from the strategy, the stock market (S&P, EuroStoxx 50 or DAX) must be in a bear market. Back tests have shown that this is best checked using a moving average.
– A moving average (SMA or EMA) below the 34 day line – bear market
– A moving average (SMA or EMA) above the 34 day line – bull market
Similar results are also found for moving averages between 30 and 40.
The equity curve shows the impressive return on investment this strategy
Don’t miss the signals. This is one of 8 strategies, where you can get the signals via Telegram. See our Offer: Services
S&P 500: March 2020
Experienced traders can optimally implement the turnaround Tuesday by selling put options, as volatility should decrease.