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Stock Index Portfolio Setup for March 1, 2024



This is the second video post today in reference to the first video on Mean Reversion strategies and how to combine Mean Reversion, V-Reversal, and Chop based strategies into the current portfolio.


We are down about 10% on the year, through February, in our live trading. It reminds me of February 2022. In February 2022, we paused our live portfolio trading in favor of research in the middle of the month since we were we were down -16% on the year. We revised the portfolio and picked up live trading again in March 2022. We were net profitable by the third week of April. We ended up about +20% on the year in 2022. Past performance isn't indicative of future results.

 

I don't like drawdowns but I haven't found a way to eliminate them from real world trading nor have a I seen any other investment methodology that doesn't also experience drawdowns. It's been difficult to see stocks go straight up and for the S&P to have had only one down week in the last four months while our strategies have underperformed.


Investment methodologies tend to be cyclical though.

 

Algorithmic trading system portfolios take advantage of market fluctuations and are not always correlated with the market. The stock market was down big in 2022 while we were up on the year.

 

While we are not market timers (going in and out of the indexes, taking long only trades in order to beat the S&P), we do work to beat the market overall by taking advantage of both long and short trades while strictly focusing on day trade strategies. The goal is to be profitable in down periods and to rival the returns of the market in uptrends.

 

We have seen an unusual time period where there has been a strong long-term, up trend on the daily and weekly charts, while at the same time, the market has been more choppy than normal intra-day, for most of the trading session.

 

While I do believe this is just a cycle, we discuss how to merge a choppy, mean reversion, V-Reversal market portfolio with the existing Stock Index Portfolio for live trading on March 1, 2024 to take advantage of this pattern.

 

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This type of trading requires capital, technical skills, and a stable trading psychology.

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