Trading Clarifications

[a_p]

Hey all,

I've been a subscriber for a few months now, but I still want to ask a few clarifications that aren't covered in the introduction materials, and I'm sure will be useful to new members as well.

1. The indicators.
Trend, sentiment, anxiety. Are these basically "tactical investor trade secret"? Can anyone see how these get derived so they can understand and potentially give input as well?

Trend, especially, is described as being different from timing top and bottom of a market, and in most literal sense, it's different, you can't time the top within a couple of weeks, but in the "indicator in action" page, looks like you can see trend reversal a month or two away. How is that not timing the market? A lot of people would probably be happy with a 6 months precision, or even a year.

2. Cash reserve.
There isn't a recommendation on roughly what portion of holdings is good to keep in cash for this investing strategy, neither in general nor depending on the indicators, I haven't noticed this mentioned in market update emails.

If one keeps entering issued plays, of which there are often plenty, then how would one keep cash for mother/father of buying opportunities?


3. What's the percentage of plays that actually gets filled?
I placed a few but they never hit the limit price, and I double checked a couple dozen plays from prior reports, and only saw GOOGL dip below the advised limit.
This way I'd actually have way too much cash, and would mainly miss the 2020 bull run.


4. End of day stops.
Described as a mental stop, where one notes the limit and places the order with that limit next day. However, if the stock is steadily going down, it's not going to get back up to the limit to be sold, right? At least it may not for quite a while.

Further more, most updates say all stops are end of day stops. If that's the case, then one would have to keep a spreadsheet of all the stops, and check all positions against it every day. That sounds like a lot of overhead, no?

And in general, what's the main purpose of this mental stop? Why not have, for example, purchase limit 60, stop at 50, sell limit at 40. Then you can just enter stop-limit right away.


5. Are there some metrics available regarding average portfolio performance? e.g. assuming all plays were assigned equal funds, what would be average return? Also, a lot of these will get hit with short term gains tax, correct?


Thank you in advance.

[Triplethought]

Hey all,

I've been a subscriber for a few months now, but I still want to ask a few clarifications that aren't covered in the introduction materials, and I'm sure will be useful to new members as well.

1. The indicators.
Trend, sentiment, anxiety. Are these basically "tactical investor trade secret"? Can anyone see how these get derived so they can understand and potentially give input as well?

Trend, especially, is described as being different from timing top and bottom of a market, and in most literal sense, it's different, you can't time the top within a couple of weeks, but in the "indicator in action" page, looks like you can see trend reversal a month or two away. How is that not timing the market? A lot of people would probably be happy with a 6 months precision, or even a year.

2. Cash reserve.
There isn't a recommendation on roughly what portion of holdings is good to keep in cash for this investing strategy, neither in general nor depending on the indicators, I haven't noticed this mentioned in market update emails.

If one keeps entering issued plays, of which there are often plenty, then how would one keep cash for mother/father of buying opportunities?


3. What's the percentage of plays that actually gets filled?
I placed a few but they never hit the limit price, and I double checked a couple dozen plays from prior reports, and only saw GOOGL dip below the advised limit.
This way I'd actually have way too much cash, and would mainly miss the 2020 bull run.


4. End of day stops.
Described as a mental stop, where one notes the limit and places the order with that limit next day. However, if the stock is steadily going down, it's not going to get back up to the limit to be sold, right? At least it may not for quite a while.

Further more, most updates say all stops are end of day stops. If that's the case, then one would have to keep a spreadsheet of all the stops, and check all positions against it every day. That sounds like a lot of overhead, no?

And in general, what's the main purpose of this mental stop? Why not have, for example, purchase limit 60, stop at 50, sell limit at 40. Then you can just enter stop-limit right away.


5. Are there some metrics available regarding average portfolio performance? e.g. assuming all plays were assigned equal funds, what would be average return? Also, a lot of these will get hit with short term gains tax, correct?


Thank you in advance.

First off I'm a rookie too and have been with TI since July of 2020. I have wondered some of the same things and my answers are only "my impression"
1) Yes I've reached the conclusion they are secret sauce, although some of the sentiment can be seen in surveys of investor sentiment over at AAII.COM
2) I have not seen a % although some of us have discussed it here. I am currently 2/5 in stocks and 3/5 in cash, based on my own sense of SOLs increasing nervousness. Most people here say that is way too much "cash drag". Many guys are 70% invested. I'm 59 YO so I am much more conservative and have a lot bigger portfolio than many. So the answer is "It depends on you". I have the opposite problem as you...there are not enough plays to deploy all my cash so I subscribe to both AI and TI and still have to come up with additional plays on my own. I will tell you I don't do nearly as well on my own plays. SOLs tend to work out better (so far). So far I would have been far better had I listened to SOL more often.
3) YES that is a problem. I was the same when I first joined - it took almost a month before I got into my first stock. However there was a time in the fall where more and more plays executed. My sense is right now SOL has kept the buys at low levels because he is anticipating a pull back in the overall market this year. No one has a crystal ball so none of us know if or when this will happen. But I will say, it's better to be sitting on cash right now and be waiting to deploy it for the MOBO or FOBO then to deploy at the top and lose it. BE PATIENT. I'm sitting on a lot of cash too and it bothers me to look back and realized I could easily have DOUBLED my wins - but hind sight is 20/20 and losing sucks too.
4) I asked the same question twice and never got an answer. There is no such thing as an "end of day stop" order in Vanguard or anywhere else that I could find. So I have assumed you are absolutely correct, end of day stops implies you have to babysit the portfolio, which doesn't work for me. So I put in STOP orders and just accept that a dip may cause me to get out prematurely. For me it's even worse. Because Vanguard doesn't allow you to put in BOTH an upper limit order AND a stop. SOL often recommends both. You have to choose one or the other. So it sucks because I have to decide whether to put in a sell order or a stop order and baby sit the other direction to put it in manually.
5) I haven't seen any %. All of us do things enough differently that it'd be tough to give an overall. But I can tell you since July 1st of 2020 depending on how I calculate it I'm up over 80% APR on the funds I've deployed. If I include my whole portfolio it's up only 42% APR (because at any given time I have 50% or more in cash - what I refer to as my "cash drag" because the cash isn't making me any money. Yes, you would incur short term tax gains if you win a lot (I have only 2 small losses of about $125 each since July 1st - I've been lucky). But I don't have the problem because I'm doing all of this inside my IRA so all gains have deferred taxes (only taxed when I take them out at retirement). I HIGHLY recommend you open a roth IRA, put the funds in there and play inside the ROTH. That way even your gains are never taxed. But of course it means you can't touch your wins for spending - it's totally an accumulation for retirement purposes.

[a_p]

Would be nice to hear these answers from SOL, since, as I suspected, I'm not the only one with these questions.

2) Of course it depends, but there there could be guidance and examples depending on the risk aversion. One trivial one, for example, is what SOL himself does, and an explanation why he does it.


3) That's because in the fall markets started letting out some steam. My main confusion is when things started bouncing back with surprising speed in spring 2020, that's when these plays would have been the least likely to execute, because there just wasn't that many dips.
As far as being patient, of course I wouldn't necessarily run out to buy stocks that went 10x in the last few months, but then again, they say that more money is lost waiting for a crash than in the crashes themselves.

I suppose one thing you could do is to keep a lot of your "non-play" assets in an all market index, and put in tiny orders for the plays, so when they actually start triggering you can get notifications and then manually go in and sell the index and put in larger orders. However, most of us can't just react on a moment's notice, in a few hours it could be late.

4) That's pretty weird to me, because its one of the core elements of their strategy, and there's a big hole in it's explanation/justification.

5) The whole idea is to attempt and beat the market, right? So if someone bought into S&P500 in the spring, they would have made close to 50%, if they, for example, got in in April, when index was already significantly bouncing back from the bottom. And that's without lifting a finger otherwise, and without guessing the bottom.
With active management of the same cash it would have to be almost double that to account for short term gain taxes, if you're not in an IRA.

The question is really simple: if SOL used these updates, how would he use them, and what are the returns. Could publish a sample portfolio, for example.

Of course, everyone is free to deviate if they think they have some additional insights, and people have different portfolio sizes, and they start trading at different points in time, etc. but doesn't anyone want to know how the strategy is working out for the people who publish it?

[AstuteShift]

The members section can answer most of the questions and how to set up most of the plays and apply the TI tactics

In terms of showing performance, well you can draw you’re own conclusions. During the covid crash, SOL and his team were the only few if not one to state to buy. You can imagine the gains

Perhaps, when I have time, I can set up a thread where I post a trading journal with pictures of the trades in real time and my approach using TI philosophy to the markets

[Investor87]

The members section can answer most of the questions and how to set up most of the plays and apply the TI tactics

In terms of showing performance, well you can draw you’re own conclusions. During the covid crash, SOL and his team were the only few if not one to state to buy. You can imagine the gains

Perhaps, when I have time, I can set up a thread where I post a trading journal with pictures of the trades in real time and my approach using TI philosophy to the markets

I love the idea of a trading journal to log your plays in real time. That would help me to improve my trading. I understand it takes time though.

[gnosis12]

@a_p

The question is really simple: if SOL used these updates, how would he use them, and what are the returns. Could publish a sample portfolio, for example.

Sol has often stated the Market Update is a weapon and can be used in many ways. Finding out how Sol uses the update won't help (at least that is my opinion) as we all have different risks and different styles. I think the huge volume of information Sol and his team provide together with all the suggestions provide more than enough help for one to develop their own trading style.

I have subscribed to dozens of publications in the past, lost a small fortune with most of them. Many of them would put out lovely tables of how they were doing, etc, but in terms of returns, the best part was their BS ads. With Sol and his Team, I have seen massive returns. How he and his team use the update is of no concern to me and I say that in a respectful manner. The only thing that I am concerned with is results and I have seen real results over and over again.

I also had to wait a long time to get into my first play but then things started to fall in place, the less I worried the more stocks I was able to get in. Patience is the key to the game. There is a reason why the Tactical Investor has so many good reviews. Their method works, it is relatively simple once you read all the Material Sol suggests, customer service is great and the bang for the buck is out of this world.

If you read all the suggested materials, the strategy is relatively simple. Divide your money into specific lots. If you have 100K for example, divide it 10 lots of 10K or 20 lots of 5K, then each of those lots is divided into three sublots and you deploy 1/3rd of these sub lots at a time.

I also noticed that there are quiet periods and then things suddenly pick up. Some plays that you could have got into recently:

AIN when it dipped below 68 this week 1/3rd was deployed at 68 or better
AVT, when it traded within Sol's suggested entry, points less than 2 weeks ago
KEY when it traded below 18.00, roughly the 2nd of Feb . 1/3rd was deployed at 18.94
USAK April 12.50 options that were trading well below the entry points until very recently. These options are nearly up 100% from their recent lows. I bought both the stock and the options
ANGI one could have got in until Jan 27 as the stock was trading below the first suggested entry price.

I am sure there are more but that's a small list of stocks one could have got into. In some cases, I pay a little bit more if I am late, usually not more than 5%.

I did not read the suggested materials and I missed a lot of plays because I assumed that I should focus on the average entry point of the stock and not the price that each 1/3rd was deployed at, stupid mistake that cost me a lot in terms of potential gains.

Last pointer; Sol is very active on these forums, and that's a rare trait indeed.

Just hang in there go over the suggested materials, and be patient. One thing I have started to implement is selling puts on stocks that I missed. Either I get in at close to the suggested price or I get paid premium if the order is not filled.

[a_p]

The members section can answer most of the questions and how to set up most of the plays and apply the TI tactics

That would be great. Could someone address the point about end of day stops? Looks like TripleThought has asked that and never received an answer either. This is still emphasized in the updates.

In terms of showing performance, well you can draw you’re own conclusions. During the covid crash, SOL and his team were the only few if not one to state to buy. You can imagine the gains

Well, the speed with which the market jumped back from March lows suggests that quite a few people bought in. I bought in myself mid March.
Since you bring that up, from what I can gather in the historical updates, plays were put on pause on Feb 27 but then resumed on Feb 29, and when the market subsequently tanked more, it went quite a bit lower than the play limits. So if one had many orders placed, they would all get suddenly filled, while price continued to tumble. People could have also stopped out immediately after entering a position if they were using regular stop limit orders.
Some stocks recovered quickly and reached new highs, others took till end of year. So depending on which ones you picked, you could definitely do worse than the market after short term gain tax.

Sol has often stated the Market Update is a weapon and can be used in many ways. Finding out how Sol uses the update won't help (at least that is my opinion) as we all have different risks and different styles.

Thank you for the detailed response. I did read the materials, and historical updates, which is why I'm here asking these questions.

To be clear, I'm not trying to call bullshit on the service, I'm just looking at numbers and guidelines, and seeing that there is enough ambiguity, that people can shoot themselves in the foot with this weapon just as well as make profit, while remaining perfectly within trading guidelines.

My question is simply could there be additional recommendations that will narrow outcome variability. e.g. If you always kept 15% in cash and entered all plays, what would that look like over time.
But if the TI team doesn't feel the need to do that and they have enough happy customers, I'm certainly not here to convince anyone they should not be happy.

[SOL]

end of day stops are covered in the section that subscribers are encouraged to read.

In essence, it is a mental stop, the stock/ETF should close at or below the stop and the next day you enter GTC limit order at or around the stop price. You can use free apps to alert you when the stop is hit and then you check if the stock ends the day at or below the stop.

In terms of why we don't put up portfolio results, we have stated that many times before. Investors try to chase performance and can lose regardless of how well the portfolio performs.

Peter Lynch's Magellan fund is a classic example of how investors can lose even when they are investing in one of the best performing funds of all time as indicated by the story below

What is not clear from this study is why individual investors have a problem. Some people suggest that it is because investors are not learning, despite all the education currently available to them. While this might be true, I think the problems go deeper than that. Fidelity Investments conducted a study on their Magellan fund from 1977-1990, during Peter Lynch’s tenure.2 His average annual return during this period was 29%. This is a remarkable return over the 13 year period. He was easily one of the best performing fund managers for his asset class. It should be noted that this was not a secret. Fidelity’s Magellan fund became one of the largest mutual funds due to its success under Peter Lynch, so it is clear that investors were aware of its performance. Whether the investors in the fund were chasing performance or investing due to his expertise is unclear. What is clear is that investors learned that Peter Lynch was investing in a method that worked.

Given all that, you would expect that the investors in his fund made substantial returns over that period. However, what Fidelity Investments found in their study was shocking. The average investor in the fund actually lost money. You read that correctly… The average investor lost money in the Fidelity Magellan fund under Peter Lynch’s tenure during a period of time when the fund returned around 29% annually. So if investors can learn enough to find good investments, why do they consistently perform poorly with their investments?

https://innovativewealth.com/wall-stree ... investing/

Read the full article and you will see that the best way to win is to understand Mass psychology. We have many portfolios, and it depends on how an investor approaches each play. To win you have to conquer fear and understand the basic principle of Mass psychology. We would rather allocate more time to finding top plays then tracking performance which the Magellan fund proved was futile because almost 75% of investors in the fund lost money because they tried to outguess Peter

[AstuteShift]

Tbh, I found SOLs updates a weapon for me and during March the biggest act of courage one can do during a crisis is to back the truck up and buy

One way to advance as a trader, treat the markets as a video game. Think like a shadow elite player who wants to milk the population.

Of course at first, they don’t make the game easy and markets will make it look like it’s hard to buy during times of panic or to sell during times of mania. The media tries to make you do the opposite, your family, friends, religion etc. Once you eliminate false filters of perception then the game changes and you become a trend player

Timing bottoms or tops is a tricky and foolish waste of time however as a more experienced trader, buying low and selling high is really the foundation to being a good trader

Remember, markets never climb a wall of joy, only a wall of worry and fall down a cliff a joy. A basic principle of Mass Psychology

Mass psychology is the ultimate trading tool and extremely valuable in these markets. Markets are not free and this tool is the way to spot danger or opportunity and to act on it

The biggest three skills to have is really patience, discipline and understanding of MP. TA is useful but should be a side after thought

[Eric]

I've been a subscriber for a few months now, but I still want to ask a few clarifications that aren't covered in the introduction materials, and I'm sure will be useful to new members as well.

Congratulations on finding TI. I think it took me 2 months to read and mostly absorb the welcome materials, another 4 months before I filled my first TI stock-pick. (I was gun-shy after getting burned on a $3,000 Fool service that cost a heck of a lot more than the $3k because it picked turds.)

1. The indicators.
Trend, sentiment, anxiety. Are these basically "tactical investor trade secret"? Can anyone see how these get derived so they can understand and potentially give input as well?

I would just watch the indicators for a couple years and see if you believe them. SOL has been doing this a long time and we pay him for his experience/opinion/analysis/research. Sentiment is available elsewhere as previously mentioned, anxiety may be proprietary, and I might be a little off-base but I think this might be SOL's take on Trend...

2. Cash reserve.
There isn't a recommendation on roughly what portion of holdings is good to keep in cash for this investing strategy, neither in general nor depending on the indicators, I haven't noticed this mentioned in market update emails.

If one keeps entering issued plays, of which there are often plenty, then how would one keep cash for mother/father of buying opportunities?

I started with 3% of portfolio value as a "full lot" so each entry point was 1%... After 2 years I felt I had way too much cash on hand (20%-25%) so I upped it by half to 4.5% for a full-lot. I also took a BUNCH of profits this fall...I still have way too much cash on hand (actually far more) but I'm not complaining; my least aggressive portfolio returned 32% in 2019 and 42% in 2020, my most aggressive portfolio returned 65% in 2019 and 256% trailing 1 year from today. Keep in mind I didn't buy (or sell because I cancelled all stops) a single share of anything from March 4th until July 7th because I am the one-man IT department for my employer and I was working 65-75 hours a week during that time to get everyone converted to laptops & working from home and upgrading our infrastructure to handle over 60 people working from home along with all of my regularly scheduled upgrades and normal full-time workload... How much cash you keep on hand is personal to your situation but probably won't be a problem if your portfolio is large enough to set 3%-6% of portfolio size as a "full lot".

3. What's the percentage of plays that actually gets filled?
I placed a few but they never hit the limit price, and I double checked a couple dozen plays from prior reports, and only saw GOOGL dip below the advised limit.
This way I'd actually have way too much cash, and would mainly miss the 2020 bull run.

I'd estimate 1/3rd to 1/2 of plays take at least one fill. It will take significant time to deploy the majority of your funds if you are mostly in cash depending on how many plays you're targeting (based on your lot-size). There hasn't been much action lately because everything is super overbought.

4. End of day stops.
Described as a mental stop, where one notes the limit and places the order with that limit next day. However, if the stock is steadily going down, it's not going to get back up to the limit to be sold, right? At least it may not for quite a while.
...
And in general, what's the main purpose of this mental stop? Why not have, for example, purchase limit 60, stop at 50, sell limit at 40. Then you can just enter stop-limit right away.

Many of the plays are in small-cap stocks that can be significantly manipulated by someone that has $250k to play with. I've personally had a stock where someone dumped about $200k worth of shares as a market order causing the share price to plummet something like 15% in 5 minutes, then they bought back all those shares over the next 45 minutes at a significant discount. You're paying SOL for his experience and opinion, but you don't have to follow every recommendation he makes. If EOD stops are too much work for you just set standard stops...he is trying to teach us to fish and some of us are going to fly-fish, some are going to troll, others are going to put a worm under a bobber. I personally don't use stops to preserve capital, I only use stops to protect profit (capital preservation is handled via small position sizes and that fact that very very few stocks actually go to zero).

5. Are there some metrics available regarding average portfolio performance? e.g. assuming all plays were assigned equal funds, what would be average return? Also, a lot of these will get hit with short term gains tax, correct?

I wanted the same thing when I started but I now see why he can't/doesn't do that. You're probably not going to enter every play and thus performance will vary. Can't calculate taxes on it because some people are playing in taxable accounts, some in tax deferred accounts, some in tax-free accounts... You were probably given somewhere between 4 and 12 months of back-issues when you signed up. Go back to them and look at the plays that have been exited and the gains on them.

[a_p]

end of day stops are covered in the section that subscribers are encouraged to read.

In essence, it is a mental stop, the stock/ETF should close at or below the stop and the next day you enter GTC limit order at or around the stop price. You can use free apps to alert you when the stop is hit and then you check if the stock ends the day at or below the stop.

“At or around” - that’s not what the section people are encouraged to read says:
https://tacticalinvestor.com/what-is-a-limit-order/

Yes… I did read all that, as I keep mentioning, and my actual question keeps getting ignored.

What is the reasoning behind it? Why is it beneficial?
If the stock is on it’s way down, this limit order you’re putting next day is not getting triggered, unless you’re lucky enough for the stock to bounce back before it tanks further. Otherwise you’re just waiting for it to recover, which could be a few months, or never. So what’s the point?

So far, what I hear from other members is: “I don’t get it either, but you don’t have to do it, so I do something different myself…”

Am I really being unreasonable in asking to elaborate on this issue… which is, again, one of main elements and is *highlighted* in market updates?…. lol

In terms of why we don't put up portfolio results, we have stated that many times before. Investors try to chase performance and can lose regardless of how well the portfolio performs.

Peter Lynch's Magellan fund is a classic example of how investors can lose even when they are investing in one of the best performing funds of all time as indicated by the story below

You’re implying that publishing results could compel me to deviate and beat those results? I have neither said nor implied anything of the sort.

As far as Magellan, that is a misleading statement without proper context that the article fails to provide.
Yes, investors that put *some* of their funds in Magellan lost money because they were investing their other funds elsewhere, or perhaps they tried to get in and out of Magellan multiple times.
As far as money in Magellan goes, it gave 30% returns, and that’s that.

And I’m quite aware that Magellan started lagging once it grew to certain size. I’m sure even Lynch couldn’t sustain 30% had he stayed with the fund. Even Buffet, who ran circles around S&P500 for decades can’t keep beating the market with over 500B under management… but I digress.


So here’s the contradiction. You’re making a point that people should stop trying to outperform those who know what they are doing i.e. Peter Lynch, or Sol.
And yet, when I ask for clarifications around how the reports could be used — it’s all up to each individual person, everyone can have their own strategy.

I suppose that as a service owner, you may not want to put in the effort to satisfy all requests, when there’s already enough satisfied customers, and that’s your prerogative… so I’ll quit asking.

Timing bottoms or tops is a tricky and foolish waste of time however as a more experienced trader, buying low and selling high is really the foundation to being a good trader

But, my friend, knowing trends in advance *IS* timing the market
Like I mentioned in my original post, just because you don’t guess exact day or the depth of the bottom, doesn’t mean you’re not timing. It’s just good timing, not perfect timing.

Also, from Sol's linkedin page:

Mass psychology is far superior to contrarian investing. Mass psychology enables one to wait till sentiment levels have turned Euphoric or extremely bearish. This enables one to predict market tops and bottoms in advance of the event.

Look, if Sol has got skills to detect shifts in sentiment and you're all making profits - awesome! I hope to make some profits too. But let's just call a spade a spade.

I started with 3% of portfolio value as a "full lot" so each entry point was 1%... After 2 years I felt I had way too much cash on hand (20%-25%) so I upped it by half to 4.5% for a full-lot. I also took a BUNCH of profits this fall...I still have way too much cash on hand (actually far more) but I'm not complaining; my least aggressive portfolio returned 32% in 2019 and 42% in 2020, my most aggressive portfolio returned 65% in 2019 and 256% trailing 1 year from today. Keep in mind I didn't buy (or sell because I cancelled all stops) a single share of anything from March 4th until July 7th because I am the one-man IT department for my employer and I was working 65-75 hours a week during that time to get everyone converted to laptops & working from home and upgrading our infrastructure to handle over 60 people working from home along with all of my regularly scheduled upgrades and normal full-time workload... How much cash you keep on hand is personal to your situation but probably won't be a problem if your portfolio is large enough to set 3%-6% of portfolio size as a "full lot".

I'd estimate 1/3rd to 1/2 of plays take at least one fill. It will take significant time to deploy the majority of your funds if you are mostly in cash depending on how many plays you're targeting (based on your lot-size). There hasn't been much action lately because everything is super overbought.

Thanks Eric, that's the kind of info I was looking for:
Just to clarify. When you mention portfolio returns, do you take into account the cash that wasn't deployed or just the plays themselves? That is, if your least aggressive portfolio was allocated 100K in 2020, did you end up with 142K for that allocation?

Honestly, I feel a little weird that I have to reiterate this, and I'm certainly not trying to call anyone out, but I have to say I do think it's perfectly normal to wonder if I could do better than just putting most of my funds in a low cost index fund and leaving it there. Am I wrong? Isn't anyone tracking this?

[AstuteShift]

That’s what investing is all about, making money with the least amount of stress.

Even before I found SOL, I was beating the market with just gamma scalping options and not caring where the market is going.
My issue with this style was that I was not supplying my trading with principles of mass psychology, which led to overtrading and mediocre gains compared to a trend player

Being a trend player is really the only way to get massive wins. It may seem improbable or even asinine but investing in general is pretty easy, it is just the masses have been Pavlov conditioned to accept low returns and to embrace the concept of fear.

As you can see or read in the updates, what we do at TI is really what the top shadow players are doing.

You can invest in index funds but why? It’s easier to accept market returns if you don’t have a passion or time in trading, that I get. This is certainly not for everyone. You can also only buy the index during extreme times of panic, this can boost your returns.

In general, knowing the trend makes everything else easier and easier to ignore the rubbish. The trend is my friend and everything else is a foe

For me personally, trading is a art just like talking and courting a pretty lady. It’s fun and the principles of MP and investing carry on to my personal life also. The masses only want quick rewards and instant gratification but that screams only they want to be taken to the cleaners. They don’t embrace change nor try, hence the saying....

Misery loves company and stupidity simply demands it

[Yodean]

What is the reasoning behind it? Why is it beneficial?
If the stock is on it’s way down, this limit order you’re putting next day is not getting triggered, unless you’re lucky enough for the stock to bounce back before it tanks further. Otherwise you’re just waiting for it to recover, which could be a few months, or never. So what’s the point?

Am I really being unreasonable in asking to elaborate on this issue… which is, again, one of main elements and is *highlighted* in market updates?…. lol

Honestly, I feel a little weird that I have to reiterate this, and I'm certainly not trying to call anyone out, but I have to say I do think it's perfectly normal to wonder if I could do better than just putting most of my funds in a low cost index fund and leaving it there. Am I wrong? Isn't anyone tracking this?

FWIW, I actually think all your questions are very reasonable. I've enjoyed and learned from reading all the nuanced responses to them, which would not have been possible if you had not brought up these concerns.

Keeping in mind that I am at the core a very simple guy, I'll chime in and throw in my two loonies, which do not necessarily reflect TI's views:

(1) End-of-day stops:

-my guess is in essence what Eric said: a lot of the plays are very volatile during trading hours and if you set automatic stops, the wild swings are going to cause you to exit a position too early, with that particular stock bouncing back above the stop before market close;

-but, you still want to have a defined point at which you exit a position; so, the mental end-of-day stop basically tells me, okay, I was wrong, time to cut my losses and sell the next day; I don't treat the stop as a "limit" order, since if a particular stock drops below the end-of-day mental stop, I'm selling the next morning at the best possible price, which may potentially be below or above the end-of-day stop the previous day; you can also change your mind the next morning, of course, if it looks like the stock is going to bounce big;


(2) Returns:

-I think you're right in that basically, no one is really tracking this, in terms of overall returns. There are so many potential plays with multiple entry and exit points.

-I cannot confirm this statistically, but my overall sense is that each of us uses the TI plays in different ways. For example, I don't like options so I don't partake in those plays. I have also had really bad experiences with leveraged ETFs (a story for another time, perhaps) so I stay away from those. And I may change the lot sizes depending on my level of conviction of the recommended asset. For example, I was already a very profitable GBTC swing-trader years before Sol put out entry points for GBTC last year, so when Sol's entry points for GBTC were hit, I went a big whole hog on that trade and it was very profitable. Likewise with platinum, as I have a certain comfort zone with precious metals.

-But I digress from your original query: no, I think no one's really tracking the overall return of a hypothetical TI portfolio with all plays and equal lots accounted for, etc. and comparing that with the Nasdaq or Dow, etc. The work required would be enormous, methinks.

-Hope this helps.

[a_p]

I don't treat the stop as a "limit" order, since if a particular stock drops below the end-of-day mental stop, I'm selling the next morning at the best possible price, which may potentially be below or above the end-of-day stop the previous day;

Sure, and that's understandable, but that's not what training materials say. So, again, you chose your own approach because it's not clear what is the reason behind the official one.

-But I digress from your original query: no, I think no one's really tracking the overall return of a hypothetical TI portfolio with all plays and equal lots accounted for, etc. and comparing that with the Nasdaq or Dow, etc. The work required would be enormous, methinks.

Oh if Sol isn't doing it, I certainly wouldn't expect anyone else to.
This time I was actually asking about the member's return with whatever plays they choose, accounting for undeployed cash and short term tax. I certainly hope you guys are tracking that.

[AstuteShift]

I don't treat the stop as a "limit" order, since if a particular stock drops below the end-of-day mental stop, I'm selling the next morning at the best possible price, which may potentially be below or above the end-of-day stop the previous day;

Sure, and that's understandable, but that's not what training materials say. So, again, you chose your own approach because it's not clear what is the reason behind the official one.

-But I digress from your original query: no, I think no one's really tracking the overall return of a hypothetical TI portfolio with all plays and equal lots accounted for, etc. and comparing that with the Nasdaq or Dow, etc. The work required would be enormous, methinks.

Oh if Sol isn't doing it, I certainly wouldn't expect anyone else to.
This time I was actually asking about the member's return with whatever plays they choose, accounting for undeployed cash and short term tax. I certainly hope you guys are tracking that.

After short term taxes and trading fees, performance is 150 percent. Then again most if not all of my trades are option trades and leverage ETFs. Also love selling put spreads in the SPX during pullbacks and collecting the premium, monster gains can be achieved. However 2020 was an insane ride, definitely not a rookie market