Market Measures

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Trend Based Management

Market Measures

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Fading the market can be difficult. Should we look at market conditions (trend) and adjust our management tactics accordingly?

For this study, we are going to use moving averages to determine the trend.

3 Month Moving Average > 6 Month Moving Average = Bull Market

3 Month Moving Average < 6 Month Moving Average = Bear Market

Bear Market
  • Manage Bullish Put Verticals at 30%

  • Manage Bearish Call Verticals at 50%

Bull Market
  • Manage Bearish Call Verticals at 30%

  • Manage Bullish Put Verticals at 50%

Study:
  • SPY
  • 2005 to Present
  • Comparing traditional 50% management with trend based management in bull and bear markets.

Tune in to uncover how Average P/L and Win Rate was influenced by these approaches and get the takeaways for how to use this information going forward.

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