This video covers my BA trading strategy. I get many requests on what my trading style looks like (as a quant trader), so I figured I would show how I trade BA, as this particular strategy is replicable and the tools I use are publicly available (linked below).
NOTE: This isn't financial advice. As well, my signal to long BA is always a Z Score of -2.6. However, my signal to short BA changes based on the market sentiment. Currently, it is -1, however for the most part of 2021 and up until last month it was set at -0.5 to 0. In general, I DO NOT recommend shorting a stock with a Z-Score of -1. It is high risk.
Its important when you are applying any strategy to back-test it first!
As well, this strategy is applicable to other stocks; however, its important to get a feel for how the Z-Score behaves as each stock is unique. For example, TSLA I have seen go as low as a -4 Z Score and as high as a +4.4 Z Score. The parameters I share in this video are my current parameters for BA but are subject to change as the sentiment changes.
Let me know your questions/comments and criticisms below!
Thank you! I will need to re-watch several times to digest the info. It is interesting that you didn't use support and resistance. Would love to learn how you trade spy. I tried z score with Amazon and Google last week, got signal to buy however Macd was pointing down so i just kept watching. Meanwhile these stocks still keep dropping...
Steversteves
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@option2022, Thanks! And yes! I think for technical traders, support and resistance is extremely important. I think its the one thing most technical traders share in common is they all use support and resistance. I will sometimes look to see if there is an area that may be considered support, but for the most part I rely on calculated ranges and degrees of being oversold. And yes! This market is nuts! Even BA, its extremely oversold still! And it hasn't been able to recover to a Z score above -1 recently. The market is super heavy, super oversold. Even looking back in history I don't see the kind of heaviness and bounceless behaviour that we are seeing currently (aside from like COVID crash but that was just straight down, none of this stuff we are seeing now). Its definitely not a good time and it makes it extremely difficult to trade! Let me know if you have any questions! And I may do a posting on how I generally trade SPY :-).