What Happens When Stock Markets Are Overbought? скачать в хорошем качестве

What Happens When Stock Markets Are Overbought?

Do not forget to become a member and join our community on our website. Understanding the concept of overbought is essential to unlock the secret of stock market success. In this video, we'll explain what overbought means, why it's crucial to understand, and what kind of return you can expect when the market is overbought. We'll also introduce the principle of mean reversion, which is vital to navigate the market's complexities. In statistical terms, mean reversion means that strong deviations from the trend will eventually revert to the mean and move in the opposite direction. Overbought is when the market has experienced a period of growth, which could be days, weeks, or months. We'll provide a clear definition and demonstrate how to identify overbought conditions using the Relative Strength Index (RSI) indicator. To back up our argument, we'll present a backtested trading strategy based on the RSI indicator. We'll buy the S&P 500 when the 2-day RSI is above 95 and sell it after N days. Our backtest shows that the returns in the first five days after entry are significantly lower than the long-term average, which is about 0.05% per day. However, as time goes on, the returns gravitate toward the long-term averages – as expected. So, if you want to make more informed investment decisions and achieve greater success in the market, it's crucial to understand what happens when the market is overbought. Watch this video to learn more! Don't forget to subscribe and like our video to support us in delivering more free videos in the future! Chapters 0:00 Overbought Stocks 0:23 Mean Reversion 1:16 A Backtest to Explain Overbought 1:47 Results 2:10 Summary and Conclusion #StockMarket #Overbought #MeanReversion #RSIIndicator #InvestingTips #BacktestedStrategy #S&P500 #TradingStrategy #FinancialEducation #MarketComplexities You can read more about it here: https://www.quantifiedstrategies.com/... TWITTER https://bit.ly/Twitter_QS INSTAGRAM https://bit.ly/Instagram_QS NEWSLETTER - QUANTIFIED STRATEGIES 30 000+ Traders read our free newsletter about trading strategies. Sign up: https://bit.ly/substack_QS RISK DISCLAIMER Quantified Strategies (SIA Lofjord) is not an investment advisor. The content and information provided are educational and should not be treated as financial advisory services or investment advice. Trading and investment in securities involve substantial risk of loss and is not recommended for anyone that is not a trained trader or investor – it shall be conducted at your own risk. It is recommended that you never risk more than you are willing to lose. Leverage can lead to substantial losses. Any use of leverage, margin, or shorting is at your discretion. Quantified Strategies (SIA Lofjord) is not responsible for any losses that occur as a result of its content and information. Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, Since the trades have not been executed, the results may have under or overcompensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs, in general, are also subject to the fact that they are designed with the benefit of hindsight. No representations are made that any account will or is likely to achieve profit or losses similar to those shown.