Author of quantified short-term trading strategies
Larry Connors
Laurence (Larry) Connors is an American trader, author and publisher who began his career at Merrill Lynch in 1982 and was a vice president at Donaldson, Lufkin & Jenrette from 1990 to 1994. He chairs The Connors Group and leads Connors Research, and has written or co-written more than 20 books on short-term, statistically tested trading strategies. He received the CMT Association's Charles H. Dow Award in 2020.
What they argue
- If a strategy cannot be quantified and statistically tested, it should not be traded.
- Buy pullbacks rather than breakouts, and buy stocks trading above their 200-day moving average rather than below it.
- In his tests, stop-losses hurt the performance of short-term mean-reversion strategies on stocks and stock indices.
Sources
Summaries are Be The Puck's paraphrase of public material. Be The Puck has no affiliation with the people listed.
Books and papers
- Street Smarts: High Probability Short-Term Trading Strategies (with Linda Bradford Raschke) (1995)
- Short Term Trading Strategies That Work (with Cesar Alvarez) (2008)
- High Probability ETF Trading (with Cesar Alvarez) (2009)
Raschke and Connors' Holy Grail (ADX pullback to the 20-day EMA)
Rule and full recordTrend following · daily · with Linda Bradford Raschke
In a strong uptrend, buy the first pullback to the 20-day EMA once price takes out the high of the day that touched it. Sell at the old high, or below the pullback low.
Best risk-adjusted results against buy and hold:
Connors RSI(2) pullback
Rule and full recordMean reversion · daily · with Cesar Alvarez
Buy a sharp short-term dip, but only in a long-term uptrend, and sell the first bounce.
Best risk-adjusted results against buy and hold:
Connors & Alvarez Double 7s
Rule and full recordMean reversion · daily · with Cesar Alvarez
Above the 200-day average, buy a close at a 7-day low and sell a close at a 7-day high.
Best risk-adjusted results against buy and hold:
ConnorsRSI (3, 2, 100) pullback strategy
Rule and full recordMean reversion · daily · with Cesar Alvarez, Matt Radtke
Buy a stock in a strong trend after a sharp one-day sell-off pushes ConnorsRSI below 10, and sell when it recovers above 70.
Best risk-adjusted results against buy and hold:
Connors %b three-day oversold
Rule and full recordMean reversion · daily · with Cesar Alvarez
In a long-term uptrend, buy after the close has sat near or below the bottom of its Bollinger Bands for three days running, and sell once it gets near the top.
Best risk-adjusted results against buy and hold:
Raschke & Connors' Turtle Soup Plus One (failed 20-day breakdown)
Rule and full recordCandles & chart patterns · daily · with Linda Bradford Raschke
Buy when a stock closes at a new 20-day low and climbs back above the old low the next day, betting the breakdown was a trap. It turns the Turtles' breakout rule on its head.
Best risk-adjusted results against buy and hold: