Actively manage 401K using indicators

PNW_experiment · Sep 9, 2015

lindq said:
And you can always give your ex a call and explore reconciliation. She's worth a quick 100% gain, no indicators needed.

This statement is a derivative of PRICELESS!! But, with the same level of foresight, financial acumen, and intelligence - which caused me to boot her out among other things - she took the penalties, paid the taxes, and bought a 50K truck with a 4" lift with her portion and it only cost 100K.

You made my day!

toc · Sep 9, 2015

backetest....backtest.....backtest.........that's the only answer i have

lindq · Sep 9, 2015

PNW_experiment said:
This statement is a derivative of PRICELESS!! But, with the same level of foresight, financial acumen, and intelligence - which caused me to boot her out among other things - she took the penalties, paid the taxes, and bought a 50K truck with a 4" lift with her portion and it only cost 100K.

You made my day!

Look for deviations from an MA, as opposed to letting MA direction guide you. What happens when price deviates from a rising, or falling MA? And by what percentage may it signal a statistically profitable entry? On what instruments? In what timeframe? And what about setting stops? (Always use stops and test them.) Considering these factors alone will cost you thousands of hours of testing before you risk a penny.

Welcome to the real world.

lawrence-lugar · Sep 9, 2015

toc said:
backetest....backtest.....backtest.........that's the only answer i have

I would say, instead...to:
....backtest....and then jump in....jump in....

Don't overthink or overanalyze things. -- you have to jump in sometime

. and learning/failing is somewhat inevitable...so you might as well get that out of the way early on. -- so you can then proceed on the road to riches, or profitability.

Chuck Krug · Sep 10, 2015

Be careful. You mentioned how you lost half of your 401k. Don't try and make it back (fast) This state of mind will make you put on more risk (and cause you to lose more often than not)
For the very long term there is no harm in using the classic 20% rule. A bull market is up 20% from the low. We were up 150% from the 2009 low, so no worries if you miss the first 20% as there was 130% more to gain.
A bear market is down 20% from the top. Average bear markets lose 40-45% from the top. (and last +- 2 years)
Good luck. Hope this helps

debitspread · Sep 10, 2015

> This state of mind will make you put on more risk

Also, not sure if OP's photo of a bodybuilder is of himself, but if so, he should be very careful to stay away from the roids. They've been the downfall of several traders on this site. Don't want to get angry and enraged and go on 'tilt' when markets move against you.

PNW_experiment · Sep 10, 2015

Chuck Krug said:
Be careful. You mentioned how you lost half of your 401k. Don't try and make it back (fast) This state of mind will make you put on more risk (and cause you to lose more often than not)
For the very long term there is no harm in using the classic 20% rule. A bull market is up 20% from the low. We were up 150% from the 2009 low, so no worries if you miss the first 20% as there was 130% more to gain.
A bear market is down 20% from the top. Average bear markets lose 40-45% from the top. (and last +- 2 years)
Good luck. Hope this helps

I've not come across this "classic" rule yet, but it exactly fits the questions I was asking except I was attempting to see if there was any way I could identify the bull market more quickly and not wait 20% up to prove it out. I suppose embedded in that 20% is tied to historical counter-trend moves which I certainly do not want to get caught on. I am going to immediately think about building this indicator and put in jstock so I don't lose the concept.

Thanks!

PNW_experiment · Sep 10, 2015

debitspread said:
Also, not sure if OP's photo of a bodybuilder is of himself, but if so, he should be very careful to stay away from the roids.

That is me, but I stick to just vitamins and creatine. Thanks for the comment and warning, and I'll even take it as a compliment.

SunTrader · Sep 12, 2015

Like doctors taking the hippocratic oath to do no harm the first rule in trading/investing is the same for your account - protect yourself at all times with stops and proper margining.

With that said take a look at this very good article for some guidance in that direction:

How To Avoid Big Declines Using Market Timing

http://www.tradingmarkets.com/recent/how_to_avoid_big_declines_using_market_timing-678837.html

DTB2 · Sep 12, 2015

I use the 10 asset class relative strength rotation style of Meb Faber. Take the top 4 strongest ETFs, monthly along with 20% in 10 yr. bonds. Performance 1973-2010. CAGR just under 18% with max drawdown of 17% and Sharpe ratio > 1.

Any more futzing for me is wasted time and likely to be counterproductive.

Good luck