Monthly Trend

This strategy is ideal for conservative investors with a long-term perspective who seek to leverage the SPX’s historical upward trajectory while aiming to minimize losses as much as possible in market corrections.

Average annual return: 51%

Key facts

  • Win rate: >70%
  • 1:1 Risk to reward $10-wide credit spread on SPX
  • 1 Trade per month
  • Trade duration: Around 30 days
  • Day trading: No
  • Adjustments: None
  • IRA account: Yes
  • Via email or executed via Autotrading.

S&P 500 vs. Monthly Trend

 20132014201520162017201820192020202120222023TOTALAVG/YEAR
S&P 50029.60%11.39%-0.73%9.54%19.42%-6.24%28.88%16.26%26.89%-19.44%24.23%139.80%12.71%
Monthly Trend100%15%-23%40%71%-6%110%71%110%-37%110%561%51%

Methodology

This strategy aims to capitalize on SPX’s historical upward trend by entering one credit spread per month with a limit order having a one-to-one risk-reward ratio. The trade duration of 30 days allows us to avoid losses in market corrections.

The trade is executed with no adjustments made post-entry based on mathematical and historical principles. The track record from 2013 onwards shows a robust edge with a win rate above 70% and only three maximum losers in a row.

The strategy is scalable according to individual account sizes, with the potential for larger positions based on the trader’s capacity and risk tolerance. We recommend allocating 10% per trade. Compounding is recommended and improves the results.

Track Record since 2013

Entry DateOpen PriceExit DateClose PriceResult% on AccountP/L on 10k10k compounded
01/02/244745.2002/05/244942.80Winner10%$1,000$11,000
02/05/244957.1303/04/245130.94Winner10%$1,000$12,100
03/04/245130.9904/01/245243.78Winner10%$1,000$13,310
04/01/245257.9705/06/245180.73Loser-10%-$1,000$11,979
Entry DateOpen PriceExit DateClose PriceResult% on AccountP/L on 10k10k compounded
03/01/20233853.2906/02/20234111.08Winner10%$1,000$11,000
06/02/20234119.5706/03/20234048.42Loser-10%-$1,000$9,900
06/03/20234055.1503/04/20234124.51Winner10%$1,000$10,890
03/04/20234102.201/05/20234167.87Winner10%$1,000$11,979
01/05/20234166.7905/06/20234273.79Winner10%$1,000$13,177
05/06/20234282.9903/07/20234455.59Winner10%$1,000$14,495
03/07/20234449.4507/08/20234518.44Winner10%$1,000$15,944
07/08/20234491.5805/09/20234496.83Winner10%$1,000$17,538
05/09/20234510.0602/10/20234288.39Loser-10%-$1,000$15,785
02/10/20234284.5206/11/20234308.5Winner10%$1,000$17,363
06/11/20234364.2704/12/20234365.98Winner10%$1,000$19,099
04/12/20234564.371/2/20244742.83Winner10%$1,000$21,009
    10W/2L $8,000$11,009
    83% Wins 80% ROA110% ROA
Entry DateOpen PriceExit DateClose PriceResult% on AccountP/L on 10k10k compounded
1/3/20224796.562/7/20224483.87Loser-10%-$1,000$9,000
2/7/20224505.753/7/20224201.09Loser-10%-$1,000$8,100
3/7/20224327.014/4/20224582.64Winner10%$1,000$8,910
4/4/20224547.975/2/20224155.38Loser-10%-$1,000$8,019
5/2/20224130.616/6/20224121.43Loser-10%-$1,000$7,217
6/6/20224134.727/5/20223831.39Loser-10%-$1,000$6,495
7/5/20223792.618/1/20224118.63Winner10%$1,000$7,145
8/1/20224112.389/6/20223908.29Loser-10%-$1,000$6,430
9/6/20223930.8910/3/20223678.43Loser-10%-$1,000$5,787
10/3/20223609.7811/7/20223806.8Winner10%$1,000$6,366
11/7/20223780.7112/5/20223998.84Winner10%$1,000$7,003
12/5/20224052.021/3/20233824.14Loser-10%-$1,000$6,302
    4W/8L -$4,000-$3,700
    33% Wins -40% ROA-37% ROA
Entry DateOpen PriceExit DateClose PriceResult% on AccountP/L on 10k10k compounded
1/4/20213764.612/1/20213773.86Winner10%$1,000$11,000
2/1/20213731.173/1/20213901.82Winner10%$1,000$12,100
3/1/20213842.514/5/20214077.91Winner10%$1,000$13,310
4/5/20214034.445/3/20214192.66Winner10%$1,000$14,641
5/3/20214191.986/7/20214226.52Winner10%$1,000$16,105
6/7/20214229.347/6/20214343.54Winner10%$1,000$17,716
7/6/20214356.468/2/20214387.16Winner10%$1,000$19,487
8/2/20214406.869/7/20214520.03Winner10%$1,000$21,436
9/7/20214535.3810/4/20214300.46Loser-10%-$1,000$19,292
10/4/20214348.8411/1/20214613.67Winner10%$1,000$21,222
11/1/20214610.6212/6/20214591.67Loser-10%-$1,000$19,099
12/6/20214548.371/3/20224796.56Winner10%$1,000$21,009
    10W/2L $8,000$11,009
    83% Wins 80% ROA110% ROA
Entry DateOpen PriceExit DateClose PriceResult% on AccountP/L on 10k10k compounded
1/6/20203217.552/3/20203248.91Winner10%$1,000$11,000
2/3/20203235.663/2/20203090.23Loser-10%-$1,000$9,900
3/2/20202974.284/6/20202663.68Loser-10%-$1,000$8,910
4/6/20202578.285/4/20202842.74Winner10%$1,000$9,801
5/4/20202815.016/1/20203055.73Winner10%$1,000$10,781
6/1/20203038.787/6/20203179.71Winner10%$1,000$11,859
7/6/20203155.298/3/20203294.61Winner10%$1,000$13,045
8/3/20203288.269/8/20203331.84Winner10%$1,000$14,350
9/8/20203371.8810/5/20203408.63Winner10%$1,000$15,785
10/5/20203367.2711/2/20203310.24Loser-10%-$1,000$14,206
11/2/20203296.212/7/20203691.96Winner10%$1,000$15,627
12/7/20203694.731/4/20213700.65Winner10%$1,000$17,189
    9W/3L $6,000$7,189
    75% Wins 60% ROA71% ROA
Entry DateOpen PriceExit DateClose PriceResult% on AccountP/L on 10k10k compounded
1/2/20192476.962/4/20192724.87Winner10%$1,000$11,000
2/4/20192706.493/4/20192792.81Winner10%$1,000$12,100
3/4/20192814.374/1/20192867.19Winner10%$1,000$13,310
4/1/20192848.635/6/20192932.47Winner10%$1,000$14,641
5/6/20192908.896/3/20192744.45Loser-10%-$1,000$13,177
6/3/20192751.537/1/20192964.33Winner10%$1,000$14,495
7/1/20192971.418/5/20192844.74Loser-10%-$1,000$13,045
8/5/20192898.079/3/20192906.27Winner10%$1,000$14,350
9/3/20192909.0110/7/20192938.79Winner10%$1,000$15,785
10/7/20192944.2311/4/20193078.27Winner10%$1,000$17,363
11/4/20193078.9612/2/20193113.87Winner10%$1,000$19,099
12/2/20193143.851/6/20203246.28Winner10%$1,000$21,009
    10W/2L $8,000$11,009
    83% Wins 80% ROA110% ROA
Entry DateOpen PriceExit DateClose PriceResult% on AccountP/L on 10k10k compounded
1/3/20182697.852/5/20182648.94Loser-10%-$1,000$9,000
2/5/20182741.063/5/20182720.94Loser-10%-$1,000$8,100
3/5/20182681.064/2/20182581.88Loser-10%-$1,000$7,290
4/2/20182633.455/7/20182672.63Winner10%$1,000$8,019
5/7/20182669.366/4/20182746.87Winner10%$1,000$8,821
6/4/20182741.677/2/20182726.71Loser-10%-$1,000$7,939
7/2/20182704.958/6/20182850.4Winner10%$1,000$8,733
8/6/20182840.299/4/20182896.72Winner10%$1,000$9,606
9/4/20182896.9610/1/20182924.59Winner10%$1,000$10,567
10/1/20182926.2911/5/20182738.31Loser-10%-$1,000$9,510
11/5/20182726.3712/3/20182790.37Winner10%$1,000$10,461
12/3/20182790.51/2/20192510.03Loser-10%-$1,000$9,415
    6W/6L $0-$600
    50% Wins 0% ROA-6% ROA
Entry DateOpen PriceExit DateClose PriceResult% on AccountP/L on 10k10k compounded
1/3/20172251.572/6/20172292.56Winner10%$1,000$11,000
2/6/20172294.283/6/20172375.31Winner10%$1,000$12,100
3/6/20172375.234/3/20172358.84Loser-10%-$1,000$10,890
4/3/20172362.345/1/20172388.33Winner10%$1,000$11,979
5/1/20172388.56/5/20172436.1Winner10%$1,000$13,177
6/5/20172437.837/3/20172429.01Loser-10%-$1,000$11,859
7/3/20172431.398/7/20172480.91Winner10%$1,000$13,045
8/7/20172477.149/5/20172457.85Loser-10%-$1,000$11,741
9/5/20172470.3510/2/20172529.12Winner10%$1,000$12,915
10/2/20172521.211/6/20172591.13Winner10%$1,000$14,206
11/6/20172587.4712/4/20172639.44Winner10%$1,000$15,627
12/4/20172657.191/3/20182713.06Winner10%$1,000$17,189
    9W/3L $6,000$7,189
    75% Wins 60% ROA71% ROA
Entry DateOpen PriceExit DateClose PriceResult% on AccountP/L on 10k10k compounded
1/4/20162038.22/1/20161939.38Loser-10%-$1,000$9,000
2/1/20161936.943/7/20162001.76Winner10%$1,000$9,900
3/7/20161996.114/4/20162066.13Winner10%$1,000$10,890
4/4/20162073.195/2/20162081.43Winner10%$1,000$11,979
5/2/20162067.176/6/20162109.41Winner10%$1,000$13,177
6/6/20162100.837/5/20162088.55Loser-10%-$1,000$11,859
7/5/20162095.058/1/20162170.84Winner10%$1,000$13,045
8/1/20162173.159/6/20162186.48Winner10%$1,000$14,350
9/6/20162181.6110/3/20162161.2Loser-10%-$1,000$12,915
10/3/20162164.3311/7/20162131.52Loser-10%-$1,000$11,623
11/7/20162100.5912/5/20162204.71Winner10%$1,000$12,786
12/5/20162200.651/3/20172257.83Winner10%$1,000$14,064
    8W/4L $4,000$4,064
    66% Wins 40% ROA40% ROA
Entry DateOpen PriceExit DateClose PriceResult% on AccountP/L on 10k10k compounded
1/5/20152054.442/2/20152020.85Loser-10%-$1,000$9,000
2/2/20151996.673/2/20152117.39Winner10%$1,000$9,900
3/2/20152105.234/6/20152080.62Loser-10%-$1,000$8,910
4/6/20152064.875/4/20152114.49Winner10%$1,000$9,801
5/4/20152110.236/1/20152111.73Loser-10%-$1,000$8,821
6/1/20152108.647/6/20152068.76Loser-10%-$1,000$7,939
7/6/20152073.958/3/20152098.04Winner10%$1,000$8,733
8/3/20152104.499/8/20151969.41Loser-10%-$1,000$7,859
9/8/20151927.310/5/20151987.05Winner10%$1,000$8,645
10/5/20151954.3311/2/20152104.05Winner10%$1,000$9,510
11/2/20152080.7612/7/20152077.07Loser-10%-$1,000$8,559
12/7/20152090.421/4/20162012.66Loser-10%-$1,000$7,703
    5W/7L -$2,000$2,300
    41% Wins -20% ROA-23% ROA
Entry DateOpen PriceExit DateClose PriceResult% on AccountP/L on 10k10k compounded
1/6/20141832.312/3/20141741.89Loser-10%-$1,000$9,000
2/3/20141782.683/3/20141834.44Winner10%$1,000$9,900
3/3/20141857.684/7/20141845.04Loser-10%-$1,000$8,910
4/7/20141863.925/5/20141884.66Winner10%$1,000$9,801
5/5/20141879.456/2/20141924.97Winner10%$1,000$10,781
6/2/20141923.877/7/20141977.65Winner10%$1,000$11,859
7/7/20141984.228/4/20141938.99Loser-10%-$1,000$10,673
8/4/20141926.629/2/20142002.28Winner10%$1,000$11,741
9/2/20142004.0710/6/20141964.82Loser-10%-$1,000$10,567
10/6/20141970.0111/3/20142017.81Winner10%$1,000$11,623
11/3/20142018.2112/1/20142053.44Winner10%$1,000$12,786
12/1/20142065.781/5/20152020.58Loser-10%-$1,000$11,507
    7W/5L $2,000$1,507
    58% Wins 20% ROA15% ROA
Entry DateOpen PriceExit DateClose PriceResult% on AccountP/L on 10k10k compounded
1/7/20131466.472/4/20131495.71Winner10%$1,000$11,000
2/4/20131513.173/4/20131525.2Winner10%$1,000$12,100
3/4/20131518.24/1/20131562.17Winner10%$1,000$13,310
4/1/20131569.185/6/20131617.5Winner10%$1,000$14,641
5/6/20131614.46/3/20131640.42Winner10%$1,000$16,105
6/3/20131631.717/1/20131614.96Loser-10%-$1,000$14,495
7/1/20131609.788/5/20131707.14Winner10%$1,000$15,944
8/5/20131708.019/3/20131639.77Loser-10%-$1,000$14,350
9/3/20131635.9510/7/20131676.12Winner10%$1,000$15,785
10/7/20131687.1511/4/20131767.93Winner10%$1,000$17,363
11/4/20131763.412/2/20131800.9Winner10%$1,000$19,099
12/2/20131806.551/6/20141826.77Winner10%$1,000$21,009
    10W/2L $8,000$11,009
    83% Wins 80% ROA100% ROA

Frequently Asked Questions

The table above does not include slippage and commission costs, as they depend on the brokerage you use. The win/loss ratio is accurate and represents live trades.

The S&P 500 index, which represents the performance of 500 large companies listed on stock exchanges in the United States, tends to go higher over time for several reasons. A main factor is the dynamic nature of its composition. Here is a more detailed explanation:

1. Economic Growth

Over long periods, the economy tends to grow, reflecting increases in productivity, population, and innovation. As the economy expands, corporate earnings generally increase, which can drive stock prices higher. Since the S&P 500 is a market-capitalization-weighted index, it benefits from this overall growth in the economy and corporate earnings.

2. Inflation

Over time, inflation leads to higher nominal prices for goods and services, which can translate into higher nominal sales and earnings for companies. This inflationary effect can contribute to the nominal increase in stock prices and, consequently, the S&P 500 index.

3. Reinvestment of Dividends

Many companies in the S&P 500 pay dividends to shareholders. When investors reinvest these dividends in buying more stocks, it can have a compounding effect, contributing to the long-term growth of the index.

4. Technological Advancements and Innovation

The S&P 500 includes companies at the forefront of innovation and technological advancements. These companies can grow at a faster rate than the overall economy, contributing significantly to the index’s performance. As older technologies and business models become obsolete, they are replaced by newer, more efficient ones, driving economic progress and stock performance.

5. Survivorship Bias and Adaptation

As mentioned earlier, the composition of the S&P 500 is not static. Companies that underperform or fall behind in market capitalization can be removed from the index, while those showing strong growth and market relevance are added. This process means the index tends to reflect the performance of the current leading companies in the economy. The continuous adaptation ensures the S&P 500 remains relevant and tends to grow over time, as it represents the more successful and adaptive segments of the economy.

6. Market Sentiment and Investor Behavior

Over long periods, investor optimism and the willingness to invest in equities can drive prices higher. While market sentiment can fluctuate dramatically in the short term, leading to volatility, the long-term trend has been upward due to the factors mentioned above, along with a consensus that investing in the stock market is a good long-term investment strategy.

Together, these factors contribute to the long-term upward trend of the S&P 500, despite periods of volatility and market corrections. It’s the combination of economic growth, innovation, and the dynamic, self-refreshing nature of the index itself that underpins its growth over time.

In our track record we risk 10% per trade for a starting account balance of $10.000. If we have a winner we make $1000, if we have a loser we lose $1000.

If you like to compound, we recommend that you select a % account value in your Global AutoTrading or AutoShares allocation.

No need to scale in. The maximum number of losers in a row has only been 3 in the last 11 years.

No. Unfortunately you would need a margin account to trade spreads.

No. There is no assignments on SPX. The options will be cash-settled at expiration.

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