July 11, 2018

Buy The Fear, Sell The Greed

The last few months, I have been busy doing research for Larry Connors’ new book, Buy The Fear, Sell The Greed. As always, it is fun and challenging to research for a book.

The book has seven strategies, trading both ETFs and stocks, with full rules and results. They are:

  • RSI Power Zones: Long ETF strategy
  • Crash: Short Stock strategy
  • Vol Panics: Short VXX strategy
  • VXX Trend Following: Short VXX strategy with over two month holds
  • Trading New Highs: Long Stock strategy
  • TPS: Long ETF strategy. Short ETF strategy
  • Terror Gaps: Long ETF strategy.

My favorite strategy is Crash because it is very similar to the short strategy I trade now. Those trades are hard to take. For each strategy there are good example trades and explanations of what the market was doing then.

Get the first chapter by clicking here.

The book is coming soon to Amazon.

Good quant trading,

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Mark - July 11, 2018 Reply

I bought the book. Had low/no expectations and expected a rehash of the other 8 or so books I have from Connors. This book easily cleared my low expectations with the VXX chapter.

The one question I have about the VXX and UVXY is if it is possible to have some insane outlier event that makes it go up 500% in a day like the volatility product earlier this year? It would seem it could have the same risks if you had backwardation in volatility.

    Cesar Alvarez - July 11, 2018 Reply

    Of course it is possible that it could go up 500% or even more. Now it would probably take a nuclear bomb to make that happen. In that case, my worry of losing money is going to be low. Seriously if you short these products you should be prepared for a 100-200% move against you. Either by trading small position size so this would not cause great harm or protecting the position with options.

Thomas Musselman - July 12, 2018 Reply

“doing research” meaning your own testing of the published strategy?

    Cesar Alvarez - July 12, 2018 Reply

    No meaning I help do the research for the book.

Ahmed - August 4, 2018 Reply

What do you mean when you say “Those trades are hard to take.”?
Thanks

Gary - August 24, 2018 Reply

Great book. When I backtest, I see great returns, but max drawdown was rather steep. Do you recommend a regime filter like < 200 MA on the S&P? Also,what about position sizing? I will play around with it, but curious about your experience.

    Cesar Alvarez - August 25, 2018 Reply

    I did not do any testing as a portfolio for the book. But yes, I would try a market timing filter. As to position sizing that depends on the strategy. For the stock ones I would try 10% per position.

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