Trading Plan: Robotic Investing Tactical Trading Strategies

Trading Plan: Robotic Investing Tactical Trading Strategies

August 1, 2018 0 By Jeremy




Trading Plan: Robotic Investing Tactical Trading Strategies

This is post #4 in a series of posts outlining my Robotic Investing Trading Plan. Make sure you subscribe to get notified when new articles in the series gets posted. Today I am taking about my trading strategies and what makes up my systems. The series of posts is based on the Van K. Tharp business plan methodology as outlined in:

Robotic Investing Tactical Trading Strategies

I have already provided an overview of my overall trading strategies on the page titled:

Robotic Investing Rules-Based Investing Portfolio

Please head over to that page to read the full details about my personal trading strategies.  In the meantime, here is the chart and table that summarizes the rules-based trading strategies I use:

Strategy NameAssets UsedRulesLink
Supercharged Index Investing
  1. MDY - S&P Mid-Cap ETF
  2. RSP - S&P500 Equal Weight ETF
  1. Hold 50/50 in MDY & RSP
  2. Sell MDY & RSP if SPY closes below 10-month moving average on monthly chart
  3. Re-buy MDY & RSP if SPY closes above 10-month moving average on monthly chart

Supercharged Index Investing
Accelerating Dual Momentum
  1. SPY - S&P500 ETF
  2. VSS - Vanguard FTSE All-World ex-US ETF
  3. TLT - Barclays 20+ Year Treasury
  1. Compute 1, 3, and 6 Month Returns for SPY, VSS, and TLT
  2. If SPY Combined Return > VSS, and SPY Combined Return > 0, Buy SPY
  3. If SPY Combined Return < VSS, and VSS Combined Return > 0, Buy VSS
  4. IF VSS Combined Return < 0 and SPY Combined Return < 0, Buy TLT
Accelerating Dual Momentum
TQQQ Trend Following (Personally Traded Version)TQQQ - Proshares UltraPro 3x QQQ
  1. TQQQ must be in a positive uptrend to trade. It must be trading above its 200 and 50 day simple moving average. If not, then TQQQ is not purchased.
  2. TQQQ is purchased at the Open following two consecutive days trading above the 200 day simple moving average.
  3. Set a trailing stop at the 50 day simple moving average.
  4. If TQQQ closes below the 50 day simple moving average, then sell next day at the Open.
  5. As long as TQQQ continues to trade above the 200 day simple moving average, then repurchase TQQQ at the open on the third day after the two previous closes were above the 50 day simple moving average.
For the version tracked on this site:TQQQ Trend Following

The rules to the left are what I personally trade, which is different than the link above, and is not tracked on this site.
ETF Swing Trading SystemMultiple ETFs
  1. ETF traded must be in an uptrend: must be trading above its 200 day simple moving average and has been heading higher over the past 50 days.
  2. ETF traded must be in an uptrend: must be trading above its 50 day simple moving average and has been heading higher over the past 30 days.
  3. The ETF must trade at least 250,000 shares per day.
  4. The 2-period Wilder's RSI [RSI(2)] of the ETF closes below 5.
  5. Set position size as 1% of account equity and 3 * ATR(20).
  6. Set abort stop at appropriate support level.
  7. Buy the ETF at the open on the next day.
  8. Hold the ETF until the [RSI(2)] closes above 90.
  9. If the ETF is above the 8 day simple moving average after RSI(2) closes above 90, continue to hold.
  10. Exit at the open following a previous day close below the 8 day simple moving average.
Stay Tuned...
S&P Weekly RotationStocks from the S&P 500
  1. SPY must be in a positive uptrend: SPY price is trading above the 200 day simple moving average.
  2. Filter S&P 500 stocks with minimum average volume over the past 20 days of 1,000,000 shares per day.
  3. Filter S&P 500 stocks with a minimum price greater than $1.
  4. Filter S&P 500 stocks with that have had a gap up or down in price greater than 15% in past 90 days.
  5. Calculate RSI(3) for each remaining stock. Filter out any stocks that do not meet this criteria.
  6. For remaining stocks, calculate the 200 day Rate of Change and sort from highest to lowest.
  7. Position size is account equity divided by number of positions held, which will always be ten positions.
  8. On Monday of each week, buy the 10 filtered stocks with the largest rate of change.
  9. Hold until position is out of the top ten.
  10. Replace sold positions with next highest ranked stock.
Stay Tuned...
(*Note: Based off of Laurens Bensdorp's book)
Daily BreakoutAll U.S. Stocks
  1. SPY must be in a positive uptrend: SPY is above both the 65 and 195 simple moving average AND 65 day simple moving average is above 195 day simple moving average.
  2. Filter stocks where 40 day simple moving average is above the 120 simple moving average.
  3. Filter stocks where 40 day simple moving average is up 3% over past 15 days.
  4. Filter stocks where 120 day simple moving average is up 5% over past 90 days.
  5. Filter stocks where 90 day daily volume is greater than 250,000 shares.
  6. Filter stocks where volume is above the 20 day moving average for volume with an offset of 2.
  7. Filter stocks where the price is greater than $5.
  8. Filter stocks where the price is crossing up over the top channel in a 40 day Donchian channel.
  9. Set position size as 1% of account equity and 3 * ATR(20).
  10. Buy any stocks at the open when all criteria above is met.
  11. Set stop using 20 period Volatility Stop with a 2 period True Range Multiplier.
Stay Tuned...
Market Long/ShortDYLS
  1. ETF long/short ETF fund held as a buy and hold.
  2. Used as a hedge for when bear markets start. Fund goes short when market turns bearish.
  3. Used to add diversify U.S. Equity exposure by combining growth and value scores, while simultaneously hedging market risk in both rising and falling markets and managing volatility.
  4. Long biased portfolio allows one to capture equity performance over the long run while mitigating market risk during bear markets.
Stay Tuned...
Lending LoopPeer-to-Peer Lending
  1. Invest in higher-risk loans with a rating of B, C+, C, D+, D, E+, and E.
  2. Reinvest all interest into additional loans as per auto-lend criteria (#1 above).
Lending Loop

Next Steps for the Robotic Investing Trading Plan

Most people think that the trading strategies they use are the most important part of their trading plan.  They are important, but I would suggest that getting grounded in your mission and goals & objectives and market beliefs are even more important.  Be sure to read those articles on this site and go through the exercise to lay those out for yourself.  The next post in this series will be about the trade tools I use to manage my portfolio.

To make sure you get notified when I post Part 5 in this series, please subscribe to my newsletter.

I would love to hear how you analyze the market. Please use the comments below to answer the following question:

  1. What strategies do you use in your own portfolio?

Featured Image: Johnston Canyon, Banff NP Alberta Canada by Jonathan Mueller

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