Turnaround Tuesday
A simple but effective strategy for MT4/5

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The strategy in detail:

The Turnaround Tuesday strategy is simple and actually requires no further explanation. The real question is: why does this strategy work?

Tuesday is the perfect day for a positive change in market sentiment. In bearish markets, investment firms close positions to realize profits by Friday. They also close positions to free up money for potential client withdrawals that occurred over the weekend. Private investors tend to get cold feet after the weekend and sell their positions on Monday. Brokerage firms try to take advantage of the falling prices by reopening their positions on Tuesday.

There are some extreme examples of successes achieved through the Tuesday Turnaround strategy. Especially after a market crash, Tuesdays have often been the days when market sentiment turned positive again.

On Monday, October 19, 1987, the Dow Jones Industrial Average fell by -23% (508 points). On Tuesday, October 20, 1987, the Dow continued to fall until a bottom was found and the market began to rise again. By Friday, the market had made a strong comeback. Despite the panic, Tuesday was the best day to buy.

A similar situation occurred on October 28, 1997. On Monday, October 27, the Dow lost more than -7%. The sell-off continued on Tuesday. A low of 6,936 was reached before the market finally began to rise and closed the day at 7,498. Once again, Tuesday was the best day to buy.

In August 2015, the “Tuesday Turnaround” strategy had another remarkable success. On August 24, the DAX came under pressure, leading to a sell-off. The lowest level the market reached was 9,338 points, with a later closing price of 9,648 points. On Tuesday, the market continued its recovery. An investor who sold at Tuesday’s market close gained 480 points in less than 24 hours.

When to open a position?
If the DAX or S&P500 is below the 34-day moving average on Monday afternoon, a long position is bought at market price on Monday evening or early Tuesday.

When to close the position?
The position is closed on Tuesday evening shortly before market close or early Wednesday at market price.