Hypothetical Portfolio

“In the world of money, which is a world shaped by human behavior, nobody has the foggiest notion of what will happen in the future. Mark that word – Nobody! Thus the successful trader does not base moves on what supposedly will happen but reacts instead to what does happen.”

From Linda Raschke’s 12 Technical Trading Rules

I’ll be trading a hypothetical US$ 10,000 portfolio and posting all my orders at night for execution next day at the open.

It is NOT investing advice or any kind of suggestion to buy or sell these stocks, it is only for entertainment and educative purposes.

My portfolio is comprised of 14 stocks and ETFs, each trade will be the same amount, around 1,000 US each, counting for some leverage, So if my  portfolio contains them all, it means I’ll be 40% on margin.

I trade my own indicators based on volatility, all orders will be at the market.

These are the stocks, concentrated ? maybe, it does not matter, all stocks move in cycles, its impossible for an individual trader to follow them all, hotels stocks are my favorite to trade, but I have added some more for diversity.

My trades make money 50% of the time, the key point is the winning trades make more than the losers.

This is not a short term strategy since I’ve known to spend some months losing money, so let’s see if I can do this for the following 6 months.

I base my trading in two indicators around the volatility of the stock, when both are aligned they signal a trade either long or short. Look at this graph of EWZ

EWZ gave a short signal at the close on Jan 6, the order to short for the next day at the open was executed at 46.78, with the close today at 46.82 the trade is losing money even though it is in a downtrend. No signal to close the short today.

When the volatility cross above the ma(13) it signal a weakness in the price of the stock, when the move is confirmed with the cross of the “smooth” volatility it’s time to go short. Like all indicators they work better in a trending market.

Today at the close there is no signal to buy or short on my stocks