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: OFF (As at 2nd March 2020) No 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
- When the system turns off add an additional stop at 10% below the high of that week and any subsequent higher week until the system turns on again.
- 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 SMA 75 as an on off switch. This should smooth the equity curve even though it will probably also reduce returns a little.
29th March 2020 - Alteration of the plan(s)
We are pretty much back in cash for both the Easy and the Momo system and our portfolio as a whole is down around 25% which parralels the XAOA.
Ideally we want to capture and outperform the up-side and not take all the falls and in this event we have failed miserably in the avoiding the falls part of the equation.
In his 'Unholy Grails' Book Nick Radge suggests using a 75 day SMA on the index as an on/off switch and aggressively ramping up the stops when the system turns off.
I will alter the plan as he suggests and see how that tracks from now on. FWIW his version of the new yearly high system manages around 17% p.a. over the test period. Read his book for more details.
I am also changing the stops in the Momo system in a similar manner.
Opening Stock Trades.
- None.
Closing Stock Trades.
- SLR.
- WAF.
Monthly Momentum System.
System Status: OFF (As at 2nd March 2020) No new positions.
Next Re-balancing 28th March 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 12 Month 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 (amended 29 Mar 2020)
- Move stop to 15% below the high of the week and any subsequent higher week until the system turns on again.
- 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
As one might expect, the system turned off this week.
Opening Stock Trades.
- None.
Closing Stock Trades.
- JHX.
- CSL.
- RMD.
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.
- None.
Chart(s) / Picture(s) of the Week
Current Trades CSL & RMD.
Mone this week.
Closed Trades Last Week.
SCP, MAH, AAC, APT, XRO, JBH.
Portfolio.
We are almost all in cash but have taken the full fall in the XAOA (around 25%) See changes to stop losses above.
Further Information
Disclosure - Personal Interests: AFI, ARG.
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
