Summary
In this chapter, we tackled the theme of reversal, which refers to trend changes. We understood the motivations that lead large operators to consistently adapt the same maneuvers before opening or closing significant financial positions, and that these behaviors can be algorithmically identified. We wrote and tested several long strategies on the Dow Jones 30 basket and some strategies, for educational purposes, on the SPY and learned how to produce and analyze a ROA heatmap in Excel.
In the next chapter, we’ll aim to use what we’ve learned so far to delve deeper into a trend and pullback approach.
