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BOP and BSP are two of the simplest strategies that we cover in our ebook Simple Trading Strategies That Work. Below is a table of the top 12 ETFs out of the 145 that we tested, using BOP over the last 9 months (189 trading days from May 1, 2011 to Jan 30, 2012).
The BSP strategy is the opposite of BOP, therefore a negative value in the BOP column indicates that BSP should be used to get a positive return. The columns labeled BOP and Buy/Hold are in units of profits per share in U.S. dollars. The Buy/Hold column shows profits if you would have just bought one share and held it over the 9 months, with negative values indicate a loss. The trading period is from close to close, with no transaction cost.
The impressive thing here is not just that we had some good profits with BOP/BSP, but that the signs are switched for most ETFs between the BOP and Buy/Hold columns. Take TUR for example. With the BOP strategy we would have made 52.84 per share, but with the dumb buy-and-hold strategy we would have lost 20.89 per share.
Below are plots of BOP profit per share (red) along with the closing price (blue) for the top 3 ETFs. Note that the first 2 plots are nearly identical because SKF and FAZ are very similar ETFs.
For more details on the BOP and BSP strategies, and for other more advanced strategies see our ebook Simple Trading Strategies That Work.
© 2010-2012 Stefan Hollos and Richard Hollos
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