How Diversity is Working in the Two System Portfolio

The Two System Portfolio has had some nice diversity this week. The two-system portfolio includes a mean reversion (V-Reversal) and a trend (Gap Continuation) strategy. Both strategies are day trade strategies for the E-mini Nasdaq. There is diversity in the methodology.

This past weekend we discussed the cycle for long trades and how it has affected Gap Continuation. The market has moved higher very quickly since the April lows while at the same time having many pullbacks from breakout levels. The cycle for "lack of follow through" was extremely overdone and the breakout this week has been beneficial for some gains in Gap Continuation.

In a portfolio configuration, we like to maintain diversity. It can be easy to stop trading a strategy in a losing streak, but if we lose diversity during the wrong cycle, it can affect our results. The market cycle was favorable for this setup as we discussed.

On Monday, V-Reversal had a double profit target day.

On Tuesday through Thursday, Gap Continuation, led this portfolio to equity peaks, while V-Reversal, which is normally the leader, has "lagged" Gap Continuation.

The hypothetical gains this week with $25 slippage and commission are:

Date V-Reversal Gap Continuation Total

06/23/2025 +$3,950 $0 +$3,950

06/24/2025 -$1,240 +$1,715 +$2,955

06/25/2025 +$280 $0 +$280

06/26/2025 -$1,075 +$1,755 +$680

There was some extra slippage on live trade but a nice week as we go into Friday's trade.

Contact us for live results.

These are just two strategies and a smaller variation of the Stock Index Portfolio 18. The Stock Index Portfolio 18 has also had a strong week.