Who is this geared toward?
Because this requires some trading knowledge and monitoring, this is geared toward the trader who is already trading and is struggling to find an edge and needs consistency with winning trades.
What type of drawdown can I expect with these strategies?
When traded as a portfolio, the strategies have had a maximum drawdown of 22.4%. This number may change over time and will be updated accordingly.
Why are there multiple strategies for the same symbol?
When these strategies were being developed, several of them had multiple iterations that were tradeable. This gives additional entries as well as exits.
Is this meant for Stock or Options?
These strategies are designed with options in mind, but they also work with buying the shares. We want to take advantage of the leverage provided by options( This creates a fantastic risk/ reward) , without using margin for that leverage. Options work because the trades usually work within a short timeframe.
When we trade with options, time is always against us. Always be sure to give the trade time. If it goes against you, you don’t want to lose the time value of your option, but if it works, the profits are larger than using shares, and your total risk is limited to the cost of the option you are using. Using shares is also an effective way to trade these strategies. All of the returns in the back tests are generated without the use of leverage of any kind.
What if I don’t know how to trade options?
Watch this video.
Do you tell me when to get in and when to get out?
No, we do not send out alerts. It is your responsibility to check the website daily for any new signals. The computer will generate a buy signal. Entries are taken at or near the open. Sometimes on a heavy opening gap down or pullback. The computer will generate the sell signal. We generally like to take sells near the end of day. Not always and it can sometimes backfire but in any case we post the sell signal if there is one.
The website is updated Daily with the new signals. Usually by 9pm. Due to the nature of technology we cannot guarantee we can post all of the new signals before the next market open, but we will try everything in our power to get it done.
Are all the signals longs?
Yes. There are over 300 signals per year just with longs. That’s a lot of trades.
When do the signals come?
The computer updates each night with signals for the next day. They are usually posted to the website the night before.
How do I know how much to risk?
Managing risk is the single most important task in trading. These signals are at the end of the day so it may require you to be ready intra day to make a move if it is needed. You should never risk more than 30% of the total Net Liquidating Value of your trading account. If more signals occur and you are already at 30%, you must decide what to trade and what to sell to stay within 30% of NLV. Any bigger risk and your account could suffer.
Are these signals back tested and for how long?
Yes these are all back tested. Some like SPY go back to 1994, some, like MARA, only goes back to 2019, because before that it was a penny stock. The length of the back test is only limited to the length of trading history for the instrument. All the signals on the charts that are posted are the actual trade signals. The benchmark that these strategies are back tested against is the SPX. Each of the strategies we offer, outperforms the S&P 500, by many multiples.
Is there any help on how to trade these signals?
We have nothing dedicated to this. Just the information contained on the website and in this FAQ.
Why do you only have strategies for these symbols?
Well, simply put... if it were that easy!! It is seriously difficult to come up with strategies that are extremely profitable and stable, meaning that they will perform in the real world and are as profitable as the backtest suggests. Anyone can backtest data and come up with a profitable strategy, but it will most likely not perform well in the actual market environment. We are constantly working to create new strategies and we will certainly add any new ones that we come up with.
Is it possible for all the strategies to go against me at the same time?
Yes, it is definitely possible. Risk control. Our account has experienced a total maximum drawdown of 23%. Most drawdowns are in the 10%-18% range.
What do I do if trades are going against me?
It is up to you to decide if the trade is a total bust and to stop out. Otherwise waiting until the sell signal is your other option.
As a general rule, we don’t second guess the computer. Some signals are really crappy but the vast majority will make $$.
Should I close the position and take profits even though the signal is still a buy?
We will generally take a portion of our profits at 1.5 ATR from entry. This guarantees us some profit in case the trade turns against us. In this case it is ok to close it early if you are collecting profits and can’t split the position. If possible, leave some on to complete the rest of the move until we get a sell signal.
Do you ever ignore a signal?
Yes. If the account is already at max risk, we will either not take a signal or close something to make room for the new signal. In general it is best not to second guess the computer. There are times when you may see more potential in the trade but if you have a sell it is advisable to not ignore it.
Do you ever get in early or out early?
We never get into a trade early. As previously mentioned, we will take profits and close a position early if it hits +1 ATR from the entry and can’t be split up. Otherwise we will hold it until a sell signal.
How do you trade the expensive symbols with options?
We trade these using options spreads. This is a very important tool for managing risk as well. Usually a call credit spread. You can also stay completely theta positive by selling puts.
Do I have to monitor the trades all day?
Not if you are trading shares. If you are trading shares, you can place buy orders before the market opens to buy at a limit price or at the market. (Please do not use margin when trading shares. It is very dangerous and we cannot be responsible for your ultimate demise. Just use the cash you actually have in your account.)
If you have a sell signal, you can also place an order to sell at the open or at a certain price. If you are trading with options, you will most likely need to be present at the market open to place the trades. Part of the advantage to this type of trading is that you are not tied to the computer all day. You can set some alerts and walk away!
Can I really make money with these signals?
Yes, absolutely. It takes effort on your part to achieve great results, but if you are willing to do the work, the win rates alone will propel your account growth. Combined with proper risk management, you will always be ready for the next successful trade.