Saturday, December 18, 2010

New start for the New Year

In order to tailor to the new format using $100,000 as an initial investment portfolio, I deleted the 2010 portfolios and started 2 new one. Needless to say the portfolios in 2010 resulted a loss and that's what the experiment was about - learn from the mistakes, march forward and not to repeat the same mistake again. The mistake was not following the stops loss strategy properly and led to the bigger loss in certain positions. On top of that I had an error with the calculation on the trailing stop loss formula on the spreadsheet.

The 2011 portfolio will start with $100,000 each on the Ocean Portfolio and TSP Portfolio. Daily moving averages cross-over will be the primary indicators as the entry point. (refer to the strategy listed on the lower right-hand side of the page). Stop loss trigger will be using a combination of ATR, RSI, ADX and Moving Averages indicators.

There were small positions in both portfolios to start off the new setup.

Happy trading and have a wonderful New Year.


Thursday, December 16, 2010

SPY looks good - up trend

20 EMA is above 50 EMA, the trend is up

Year 2010 is coming to the end

December is half gone and the year of 2010 will soon be over. The overall stock market is considered to be good following last year's huge gain. The SPY of ETF index fund which is equivalent to S&P 500 posted a gain of 7.8% year-to-date. Meanwhile my first year Ocean Portfolio using ETFs as the investment portfolio has been disappointed due to my improper used of stops and subsequently let the loss accumulated.

In coming year,  I will continue to use moving averages with cross-over as the lead indicator for trend following. I will use daily average instead of weekly and I will apply the ATR, RSI, ADX indicators as extra filters for profits and stops as opposed to the fixed percentage that I used this year. 

In general, my method is as follow: the daily moving averages (DMAs) for trending following will be 20 and 50 days, when DMA-20 crosses above DMA-50, the trend is up. When DMA-20 crossed below DMA-50, the trend is down. I will start off with $100,000 each as the hypothetical portfolio for two portfolios I am tracking. (1) Ocean Portfolio and (2) TSP portfolio - the government retirement system for federal employees. I hope these two portfolios will achieve better results in 2011 than this year.