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Hedging Your Portfolio
Protect, Prosper & Compound
Join Me Saturday, January 11th, 2020 at Noon EST
for Our Special Webinar on Hedging Your Portfolio
Imagine if 95 weeks ago you had $100,000 to invest in the stock market.
On March 17th, 2018, we did just that. We bought 367 shares of the SPY on March 17th at $272.47. Not a bad investment considering the SPY closed on January 2nd, 2020 at $324.87 for a gain of almost 26%, or a profit of $25,833.00.
Now think about if you were one of our hedging students and had taken the class. That same $100,000 is now 495 shares and has a value of $160,810 or an almost 61% gain. We continued to use our model to buy when the SPY went down, especially December of 2018. During this period, we never had more than 3-4% risk while the unhedged portfolio was at risk.
Think about never selling stock ever again, buying every dip with money created by the hedging model - in other words, compounding your portfolio instead of panic selling.
Click Here to join me Saturday, January 11th, 2020 at NOON EST and learn the tips and tricks of never selling a stock ever again. As a bonus we will share with you our Retirement catch up program for those who have not saved enough!
Tomorrow, you could begin doubling your account every single month starting with one letter.
The letter will come from a 20-year trading professional named Ian Cooper. He says, “In 2017, following my trades you would be doubling even tripling your account some months. Let me show you how.”
He will show you exactly what to do... and he’ll give you the blueprint for just $1.
History and Development of the Dynamic Trading System
by Adam Oliensis
I have been a full-time independent trader since the mid 1990s. I was lucky enough, or unlucky enough, depending on how you look at it, to have cut my teeth in trading during the heady days of the Great Bull Market. I learned about fundamentals, and then I learned about technical analysis. I learned about stocks, options, and finally futures contracts. And it seemed to me that I had stepped into a goldmine. It was easy back then. You found a tech stock that you liked and maybe even understood. You bought calls. You waited a couple of weeks and then you sold them for a profit. Then you rolled those calls up and out, and waited a little more, and then you took even more profits.
Then, the Great Bear Market came. And every single trader I knew from “back in the day” was wiped out. I got hurt too – big time. The game had changed, on so many different levels, that everything I thought I knew turned out to be essentially useless.
So, I started over, from scratch. I began to try to understand what was really driving the market. I began the search for a trading model (or system) that would work in bull markets, bear markets, and trendless markets as well.
I began the search for a system that would help to minimize the stress of trading too. Why? Because the wild, emotional swings were taking their toll on my personal life.
I wanted a system that would give me clear signals, based on objective criteria, and that would make me money. I wanted it to have clear risk/reward parameters, and I wanted it to take just minutes per day to implement at the close of each trading session.
I started with some simple premises and some preconceptions about how to analyze the market. And then I asked my computer some questions about how the market tended to behave in the past (of course we talked in the language of mathematics). I made observations based on impressions I had about the market, and then I asked my computer whether those observations tended to be true or not. Often there were gains of truth in my observations, but my computer answered my questions quantitatively and then told me EXACTLY how close to (or far from) the truth my observations tended to be. And so, using this dialectic method for many months, my computer and I derived a trading system that has, over many years, had an extremely strong tendency to be profitable.
Our goal in developing this trading model was to create a completely mechanical system that would require no real-time discretion for the trader. Our goal was to gain the best statistical edge that we could discover and codify.
And in our hypothetical back-testing, we fond what we were looking for: The Dynamic Trading System.
Now, it merely remains for a trade to execute the model’s signals in strict accordance with its rules. We believe that such a system has a terrifically valuable place as a part of one’s portfolio. Such a system can increase the co-variance among the various segments of one’s portfolio, and increasing co-variance remains an important part of modern portfolio theory.
For the most part, the System ignores price and derives its signals from proprietary algorithms based on non-price-related market data. In hypothetical back-testing over periods of years and in a variety of market environments, some of the most efficient values for these algorithms turned out to be extremely surprising and counterintuitive. And there will likely be many times when the System-generated trades look, to the naked eye, completely insane.
There will be loses in trading this system. Indeed, if we trade 100 times, both our hypothetical tests and our real-time trading experience using the System suggest that the System will have in the neighborhood of 20-35 losses. There will be points in time when the System makes what will look to be precisely the wrong move. There will be times when you (and I) may feel discouraged by the results on individual trades or on a series of trades. But, if the market continues to display roughly the properties that it has over many years, then our studies suggest that, over time, we should have significantly more winners than losers. And the value of the trading portfolio would be likely to increase significantly, no matter whether the market rises, falls, or goes nowhere.
Over the long term, our tests suggest that the System is likely to generate trading signals on the S&P 500 (SPX) at a rate of about 2 rounds-trips per month and on the Nasdaq 100 (NDX) up to about 4 round-trips per month.
There is no bullishness or bearishness in the System. Only a quantitative approach to what is likely to occur, based on how the market has behaved in the past… and on our part, a slavish devotion to trading the System according to its rules, both long and short, as well as to maintaining a “statistical head” about it.
We are simply trading the rules that have tended to work best in our hypothetical tests and in our real-time trading experience, over the broadest array of circumstances.
We will monitor the market’s properties and tweak the System only if and when we find criteria that improves its long-term statistical edges in meaningful ways.
Of course, past performance cannot guarantee future returns. Let’s say that again, just to be clear: Past performance is NOT a guarantee of future returns.
On the other hand, while there is significant risk of loss in trading commodity futures, options, Exchange Traded Funds or Mutual Funds, understanding how the market has behaved in the past can certainly be helpful in prognosticating what trades may have tendencies toward profitability in the future. And if you think about it, we have two choices: either we can trade a system that HAS performed well in back-testing and in real time, or we can trade a system that HAS NOT performed well in back-testing and in real time. Neither is a guarantee of future returns, but given the choice between the two… well, you’ll have to be the judge of which seems the wiser alternative to you.
PLEASE READ: Auto-trading, or any broker or advisor-directed type of trading, is not supported or endorsed by TradeWins. For additional information on auto-trading, you may visit the SEC’s website: All About Auto-Trading, TradeWins does not recommend or refer subscribers to broker-dealers. You should perform your own due diligence with respect to satisfactory broker-dealers and whether to open a brokerage account. You should always consult with your own professional advisers regarding equities and options on equities trading.
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