Could it be this easy?

[guru]

Great example of why 99% of traders lose.

 

[longandshort]

This is a basic momentum/trend following strategy that lots of people use.

 

[zdreg]

Commissions/trading costs are almost nothing. I think they can literally be nothing if you are using Robinhood or IB light or other free shops. Taxes can be a bunch, but since you are selling your losers and letting your winners run you will be showing tax losses or small gains, at least early on. But yes, taxes are a concern with this or any other strategy that doesn't involve buy and hold until you die.

This is not the 1st time you have presented an idea on ET looking for approval. As previously, I suggest you try it out with your money or at minimum use a demo- account.

 

[DiceAreCast]

How do you owe taxes on losses? Think before you blabber.

You'd probably get eaten alive on comms, trading costs and taxes.

 

[DiceAreCast]

Taxes are your last concern. Taxes are a sign you actually make money.

Commissions/trading costs are almost nothing. I think they can literally be nothing if you are using Robinhood or IB light or other free shops. Taxes can be a bunch, but since you are selling your losers and letting your winners run you will be showing tax losses or small gains, at least early on. But yes, taxes are a concern with this or any other strategy that doesn't involve buy and hold until you die.

 

[zdreg]

How do you owe taxes on losses? Think before you blabber.

There are those who blabber. There are others who can't read carefully other people's posts and go on the attack. Then there are those people who manage to do both.

 

[ph1l]

What about an investment/trading (whatever you want to call it) strategy, where you start with [30] stocks. They could be purely random, or you could have some criteria. Whatever. But once you buy your [30] stocks, once every [week] you sell your [5] biggest losers/least winners and replace them with [5] new stocks (random or that also meet your initial criteria, whatever). You keep that up forever and ever.

Does that portfolio make one a ton of money over time? Sell the losers, let the winners ride baby!!!!

This is like the strategy in "Stocks on the Move: Beating the Market with Hedge Fund Momentum Strategies," by Andreas Clenow.

 

[Snuskpelle]

This is not the 1st time you have presented an idea on ET looking for approval. As previously, I suggest you try it out with your money or at minimum use a demo- account.

+1



Can this sort of thing work? Absolutely. If it ends up working for you, is it because of it? Probably not, my guess would be that over a sufficiently long time span it isn't adding alpha (discriminatory ability to allow you to do better than random/market average). To the extent it is useful to you is as a a part of your decision making framework, e.g. because it lets you periodically review your choices and force you to drop sour bets, in a way that you otherwise might not have on a discretionary basis.

One man's fecal matter is another man's treasure. So better test it yourself, with your own edge appended (because again my hunch is you are going to need one beyond the described method). For one, the method would depending on frequency incur significant transaction costs that need to be overcome.

 

[smallfil]

Well, I think this strategy WOULD constitute a simple trend following system. You are basically selling the ones trending down or trending up less, holding the ones that are trending up the most! Let those profits run!!!

How are you letting your profits run when you are exiting on pullbacks? Stocks do have periods of consolidation or pullbacks. Does not mean the trend is over. Not even close. So, you end up ditching stocks that could very well end up the big winners. What you are doing is not trend following the way it is intended. And I subscribe to trend following as my method of trading.

 

[taowave]

This is a pretty simple system with weekly rebalancing based on momo/ relative strength..

Now all you need to do is get off your ass and backtest it