In my non-registered account I am developing my trend following strategy continuously. I don’t pretend to have all the answers. I am sharing this ongoing learning journey with you in this series.
I am always exploring new methods of trading, new markets to access, and better control of risk and opportunities. My main goal is to avoid large losses while achieving reasonable returns over time. I try to focus on trades which I believe have good reward-to-risk ratios.
You will see me trade index products, currencies, and commodities primarily with leveraged ETFS, futures contracts, and LEAPS options for maximum capital efficiency. I try to risk small amounts of capital with each trade targeting high return multiples on that risk.
One thing that is easy to notice is most weeks have no action and trading is quite boring. The equity based positions move in relative tandem. Volatility positions are the only place where exciting things seem to happen more frequently.
Currently my exposure to stocks in the trading account is around 20 percent. Most of my cash is in BSV.
*Information on this post is dated at market close, Monday, June 17, 2019.
Momentum Factor: -8
On May 7, I purchased a call ratio backspread for a small account credit when VXX was trading at approximately $29 per unit. This is a hedged position. VXX is now back into a downtrend. This trade is set up to go into a profitable position if the price continues its downtrend.
QQQ: LEAPS Options
Momentum Factor: +10
I opened a position in QQQ on May 17 with a purchase of $160 call options when QQQ was at $184 per unit. My trade is still virtually flat with momentum turning back up this past week.
Gold: UGLD ETF
Momentum Factor: +10
I opened a half position in gold on May 29 with a purchase of the 3x leveraged ETF UGLD at a price of $91.15 per unit. With continued upside momentum I moved to a full position on June 3 when UGLD was at around $99.40 with an average position price of $93.20. My entry was based off a signal in GLD.
We'll see if gold can finally break through the $1,350 price ceiling we've seen over the past few years. Although the price pushed past this number several times in the past weeks, so far it hasn't been able to maintain prices above $1,350 on the close.
Brazil: BRZU ETF
Momentum Factor: +9
I opened a full position in Brazilian stocks on June 7 with a purchase of the 3x leveraged ETF BRZU at a price of $30.25 per unit. My entry was based off a signal in EWZ. While down a little bit since my entry, the trade is still quite a way from my stop price.
Europe: EURL ETF
Momentum Factor: +8
I opened a nearly full position in European stocks on June 7 with a purchase of the 3x leveraged ETF EURL at price around $27.30 per unit. My entry was based off a signal in VGK. While down a bit from my entry price, there is still a lot of room before I need to exit this trade.
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