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Question for the board on investing


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#1 CLK

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Posted 15 January 2017 - 10:20 AM

If you have a 401k, do you try to trade it with short term moves at all or try to time intermediate turns ?

 

I have been in cash for a long while waiting for a significant top, which seems is not going to happen, if I just jump in 50-100% 

long right here the market could go against me 10% which would not be good. With Vanguard there is a 60 day lock out period

upon selling for most funds unless you mail a letter which is too slow to trade one fund. With NYAD being way ahead of the market, I think there is little chance we see a significant top any time soon. We did get one in 2011, but that was early off the bear market lows, unlike now. With Trump looking to bring companies back to the US, I doubt the economy or earnings will be negative going forward. So, for me I think the best strategy is to buy the decent dips we have seen over the last couple months and sell quickly, and just rotate funds.



#2 Harapa

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Posted 15 January 2017 - 10:30 AM

As simple as this:

 

Maintain all LT positions with a 3% trailing stop using SPX as a benchmark.

 

Once you are out wait for ~ 2-3% move from a recent low to get in, set 3% trailing stop loss on entry.

 

This approach will under perform near market tops (which tends to be long narrow range spells), but certainly will help you catch >80% of a bull move.

 

This requires neither tea leave reading nor watching price every few minutes. And most importantly you sleep well. A 10% correction without first registering a 3% loss is a rare event, often reversed very quickly..

 

If you can't afford 3% risk...than you should not be in equities, IMHO.


Edited by Harapa, 15 January 2017 - 10:38 AM.

My comments are for entertainment/educational purpose only. All posted trades are fake (aka. paper) trades.


#3 Harapa

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Posted 15 January 2017 - 10:45 AM

Tea Leave Reading:

Power of 13

Most bottoms emerge from 13 days/weeks/months lows. Once SPX have reached these points entry after a 2-3% spike is a high probability winner (>90% win)


My comments are for entertainment/educational purpose only. All posted trades are fake (aka. paper) trades.


#4 CLK

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Posted 15 January 2017 - 11:02 AM

The math doesn't add up. The market is up 11% since Jan. 4th 2016, there were four 3% or greater dips, 3x4=12% loss plus 11% gain = 1% loss

for the year on this strategy. Yeah, if you didn't wait for the 3% bounce to get back in, all would be fine. Seems more like selling low and

buying high, although the results might be better in a low volatility market.


Edited by CLK, 15 January 2017 - 11:10 AM.


#5 Harapa

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Posted 15 January 2017 - 11:05 AM

The math doesn't add up. The market is up 11% since Jan. 4th 2016, there were four 3% or greater dips, 3x4=12% loss plus 11% gain = 1% loss

for the year on this strategy. Yeah, if you didn't wait for the 3% bounce to get back in, all would be fine. 

"This approach will under perform near market tops (which tends to be long narrow range spells), but certainly will help you catch >80% of a bull move."


My comments are for entertainment/educational purpose only. All posted trades are fake (aka. paper) trades.


#6 Harapa

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Posted 15 January 2017 - 11:16 AM

The math doesn't add up. The market is up 11% since Jan. 4th 2016, there were four 3% or greater dips, 3x4=12% loss plus 11% gain = 1% loss

for the year on this strategy. Yeah, if you didn't wait for the 3% bounce to get back in, all would be fine. Seems more like selling low and

buying high, although the results might be better in a low volatility market.

FACT Check: (Though not popular now a days)

 

SPY return with dividend

Entry Date/price    Exit  Date/price 

02/02/2016  185.01  06/24/2016 203.31   G/L: 9.89%

06/29/2016  203.32 11/03/2016  208.06   G/L:2.33%

11/11/2016  213.90  12/31/2016  223.35  G/L:4.42%

 

Total G/L:16.64%


Edited by Harapa, 15 January 2017 - 11:19 AM.

My comments are for entertainment/educational purpose only. All posted trades are fake (aka. paper) trades.


#7 Harapa

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Posted 15 January 2017 - 11:20 AM

 


Edited by Harapa, 15 January 2017 - 11:20 AM.

My comments are for entertainment/educational purpose only. All posted trades are fake (aka. paper) trades.


#8 CLK

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Posted 15 January 2017 - 01:07 PM

Choosing a starting capital of $50,000  Note, Vanguard only gives eod entry and exits, orders have to be placed by 3:30 est.

 

Trade 1:  3.1% stop loss 50,000 x .969 = 48,450

Trade 2: long @ 4.8% off the closing low, immediately stopped for 3.1%.                48,450 x .969 = 46,948

Trade 3: long @ 4.1% off the closing low, stopped out for an 8% gain.                     46,948 x 1.08 = 50,704

Trade 4: long @ 3.2 % off the closing low, immediately stopped for about 3%.         50,704 x   .97 = 49,183

Trade 5: long @ 3.6% off the closing low, 2.5% gain after Oct. stop out.               49,183 x 1.0215 = 50,240

Trade 6: long @ 3.7% off the closing low, 5.8% paper gain.                                  50,240 x 1.052   = 52,852

 

$50,000 x 1.057 = 52,850 or a 5.7% gain.   Buy and hold from Jan. 4th = 15% gain. This system under performed buy and hold by 62%.

 

 

 

 

 

 

spy%20performance_zpsldfn4nhn.png


Edited by CLK, 15 January 2017 - 01:15 PM.


#9 Harapa

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Posted 15 January 2017 - 01:17 PM


"This system under performed buy and hold by 62%."

 

How did it do relative to cash that you are in  for a very long time?

 

Reasonable expectations leads to reasonable results. If you are unwilling to take risk...you need to pay for protective maneuvering.

 

In responding to you original post,I was under the impression that you wanted something to make better than cash with minimum risk. I probably was wrong...actually big time wrong.

 

Please ignore what I suggested. You need a holly grail!

 

 


Edited by Harapa, 15 January 2017 - 01:20 PM.

My comments are for entertainment/educational purpose only. All posted trades are fake (aka. paper) trades.


#10 CLK

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Posted 15 January 2017 - 01:24 PM

Couple mistakes at the end: Trade 5 48,183 x 1.025 = 50,413

                                              Trade 6 50,413 x 1.058 = 53,337

                                     

50,000 x 1.067 = 53,350.   6.7% gain.