FAQ

What is trend trading?

A trend trading strategy is based upon identifying the start of an upward trend in the price of an underlying (stock, ETF, commodity, currency, etc) and buying the underlying.  The underlying is held until a downward price trend is identified at which time you sell. My trend trading strategy is purely mathematical – I do not make trades based on instinct, my gut or my belief about the value of an underlying.

How many ETF’s do you trade?

The number of ETF’s in my trend trading system may vary over time but my system currently trades over 30 ETF’s.

Do you use inverse ETF’s?

The only inverse ETF’s I use are PSQ, RWM, TBF and EFZ.

I just started using your Trend Trading system. Should I buy all the ETF’s currently held or wait for new Buy signals?

Once my system buys an ETF, I do not predict how long the ETF will be held for or how high the price will go before a Sell signal is issued. Thus, I never know or predict when a Sell signal is going to be issued.  Consequently, I simply don’t know whether an investor would be better off buying all the ETF’s that are held by my system once he/she starts following my trades.  There are at least three options available: buy positions in all the ETF’s that are currently held, wait for Buy signals before buying the ETF’s or take 50% positions in the ETF’s that are held.

After I buy an ETF, where do I place the stop loss?

I don’t use stop losses with my Trend Trading system.  Based on backtesting of some common stop losses, I have concluded that stop losses would not improve my trading system’s performance.

When and how are signals communicated?

My systems are generally updated in the evening and I enter trades for the next day in Collective2.com. These trades are then e-mailed to subscribers advising them of the planned trades for the next day.

Do I have to use leverage?

My Trend Trading system as presented on Collective2.com uses 100% leverage.  For example, when the system first started on Collective2 it was based on an initial capital of $100,000.  Therefore, at the outset it could have had $200,000 ($100,000 in initial capital plus $100,000 in margin) in open positions.  The amount of margin to use is a personal choice.  You can use no margin, 50% margin, 100% margin, 125% margin, etc.  The less margin that is used the lower the returns will be but the lower the drawdowns will be as well.

Is this a day-trading strategy?

No.  The average time that an ETF is held is generally between 20 and 30 trading days.

What books would you recommend?

Where can I find up-to-date performance statistics on your Trend Trading strategy?

Click here.

Have you found the Holy Grail of investing?

The Holy Grail of investing is realizing there is no Holy Grail!