The trading idea
In a bull market, prices regularly rise on Monday, Thursday, and Friday. While prices tend to fall on Tuesday and Wednesday. In a bear market, it's exactly the other way around.
Bull market
If the opening price is above the exponential moving average on a trading day, we assume a bull market. We therefore always go long in the market on Monday, Thursday and Friday, and short on Tuesday and Wednesday. So on Monday morning we buy a position and close it just before the closing bell. The following Tuesday we are short selling in anticipation of falling prices. We will continue to follow this plan for the rest of the week.
Bear market
If the DAX is below our trend filter at the start of trading, we assume a downward trend, i.e. a bear market. We apply the opposite behavior: on Monday, Thursday and Friday we short the market. Whereas we go long on Tuesday and Wednesday. Applying this simple rule to historical data should result in a profitable and stable trading system.
