Sunday, August 29, 2010

Ocean Port and Trader Pick port go cash

Sold all inverse ETFs in Ocean portfolio and Trader Pick portfolio. YTD returns on both portfolios are negative. I will wait for a clear setup to re-enter.

Saturday, August 14, 2010

Still holding the same positions for all simulated portfolios

It's been a while for me to add new posts here. Currently the three portfolios are still holding the same short positions except the TSP port is in AGG ETF bond. My short experiment in this blog is frustrated and the results showed that it is difficult to go long and reverse to short using the weekly chart by following the trend with crossover moving averages unless the trend exists for a rather long period of time. It doesn't feel good no matter when it is either long or short but the markets go against the holding positions either way.

To play it more conservative in the Ocean Portfolio, I may try using the ETF bonds such as AGG, TLT or SHY when the trend is down and get back into long ETFs when the trend is up. As for now, I am betting the market is trending down for now and so I am holding the shorts until the next signal shows.

A reader had asked me if the EFZ in the Ocean Port hit the stop yet. It did but I was holding it because I used the other 50% of ETF (SH) for gauging the 12% stops which the entire port did not hit the 12% yet.

I had been looking at the pairs trading strategy which I will try it using the Trader's Pick portfolio as an experiment. Basically "Pairs trading" is buying long and selling short with a pair of equities at the same time where they are highly correlated. You get in the position when they are diverged away from each other and you close out all positions when this pair "Return to mean". By doing that, you can profit the difference in gain and loss from the pair. Pair trading sometimes is referred as "Market neutral" with the principle of hedging. If you want more info or definition about Pair Trading or Market Neutral, please google it and it will give you much more information on this subject. It is profitable and stable than other trading strategies. So they say ...