Disclaimer - Read this first!
This is not a signal service. While endeavoring to post signals before time occasionally I will only be able to post signals a day or two late
I am not a financial adviser. Some of these are paper trades. I am not suggesting you follow these signals. If you take any action based on my blog you do so at your own risk.
Long term wealth creation - background.
My own investments are held in a portfolio much like the Easy system as well as a slowly growing longer term holding similar to that outlined below.
Our starting position was $200,000. The investment scenario is to have two quite different active investing styles that feed a long term buy and hold style.
- Easy System - A trend following system on the ASX 300 using weekly charts and trailing stops.
- Monthly Momo - A momentum system aims to hold the top ten stocks in the ASX 100 when it is on and nothing when off.
- Long Term - A buy and hold strategy based on index funds fed by dividend re-investment of the index funds themselves and the stocks in the above two systems.
The starting position for this blog allocated $95,000 to each of the first two strategies and $10,000 to the long term.
Easy Share Trading System.
System Status: ON (As at 20th October 2019)
Take new positions. Trailing stops EMA 7 < EMA 12.
System details.
These trades are based on Peter Castle's 'Easy share trading system' with a few of my own tweaks. On his web site he kindly provides quite a few details on how his system works and a list of trade entry's each week which I will be using to run these trades here.
Peter also has an e-book with much more detail and explanation of his system and trading in general. I haven't read the book but encourage you to do so if you are new to trading.
- Only trade the Top 300 shares on the ASX. Only open positions when the system is on.
- Current Position Size = $6,000
- Select stocks priced between 10 cents and 20 dollars - theoretical price leverage.
- Buy the cheapest stock(s) on Peters 52 week high page assuming he continues listing them, Alternatively, buy the cheapest stock(s) in the ASX 300 making a 1 year high. For example: Friday's close is higher than last Friday's 50 week upper Donchian Channel That's the buy signal. Use around 10% of total capital each week until you have a portfolio 100% in equities. The aim is to fill your book in 10 weeks from when the system turns on and have between 15 and 25 stocks.
- Sell any stock if the EMA 7 falls below the EMA 12
- Now re-employ that money into further stock(s) using the same rules as 1 to 4.
- Any purchase should have a minimum $500,000 a day turnover (for my trading size).
- Use XAO_AX Daily EMA 20 and Daily EMA 30 as an on off switch. This should smooth the equity curve even though it will probably also reduce returns a little.
Opening Stock Trades.
- SLR.
Closing Stock Trades.
- MLD.
Monthly Momentum System.
System Status: ON - as at 26th October 2019.
Next Re-balancing 1st February 2020.
- Only trades when the ASX100 is rising as defined by a weekly close above the 27 week WMA + 1%. The system turns off when the ASX100 falls below the 27 Week WMA
- Buy the 10 highest momentum ASX 100 stocks in equal weights. Momentum is defined by the 30 day EMA of the 180 day ROC.
- Stop Loss Rules.
- System on - Any stock not in the top 15 at the beginning of each month. Replace with the best performing stock not currently held.
- System off - Close all positions
- Note - I am not trading this system (at the moment) but I will be updating each weekend just like the others - remember This is NOT a signal service
Opening Stock Trades.
- None.
Closing Stock Trades.
- None.
Long Term.
System Status: ON - as at 1st Sep 2019.
- Only holds Index linked funds
- Each six months sum dividends received in the easy and Momo system and buy alternatively AFI or ARG.
- Minimum buy is $3,000
- AFI and ARG holdings are set up for 100% dividend re-investment
Opening Stock Trades.
- Nil.
Chart(s) / Picture(s) of the Week
Easy System.
Here are all the Easy system trades so far. N.B. MLD is showing at Fridays closing price but we won't know what the actual loss will be until after we sell it on Monday. We are 5 Months in and still scratching along around break even but it could have been more profit or loss depending on our start date. What you can see here is the losing trades are falling out first while the winning trades tend to persist. In my experience this is true of all trend trading systems and is often what discourages people as a few realised losses in a row has them searching for a more 'reliable' entry. What we should see is that the winning trades will make up for the losing trades and then some. It can take up to three years for a system to show profits depending on when it kicks off which is why trading isn't easy even though it is simple.
Current Trades PRU & SGR.
PRU chugging along. You can see many entries on PRU going back to last March and none of them would have been stopped out yet! SGR, on the other hand, looks to be headed straight into stop loss territory next week but we can only wait and see at the moment.
Closed Trades last week.
None.
Further Information
Disclosure - Personal Interests: AD8, BIN, CCL, CMW, DOW, GDI, MGR, MVP, SCP, SDF, SSM, TLS, AFI, ARG, BWX, DHG, IFL, MAH, MLD, MSB, PPC, PRU, QAN, STO.
All Stock charts courtesy of www.IncredibleCharts.com
Note: I do not receive any benefit from promoting Nick Radge, Dave Landry, Andreas F Clenow, Easy Share Trading Systems, Incredible Charts or anything else.
For more information on the Easy Share Trading System see http://www.easysharetradingsystems.com.au/objective-and-planing/i-know-what-you-want
