SP500 strategy
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Difference between the SP500 strategy and the stock market barometer?
The SP500 ETF strategy gets its signals from the stock market barometer or the Market Alert Index.
An ETF is traded on the SP500 (SPY). Alternatively, futures can be used. We deliberately developed the strategy and opted for an index, the SP500, in order to exclude the risk of individual stocks.
There are not many trading signals per year, between 3 and 10. There are also some position size adjustments. This makes the strategy ideal for working investors with little time.
This is the main difference to the Market Alert Index, the varying position size and the adjusted entry and exit management.
If the MAI shows red, it does not mean that we are going to open a short position immediately! An existing long position is also not necessarily sold immediately.
The situation is similar when the MAI turns green. In this case, too, a type of technical market confirmation (price action) is awaited.
The alert index itself only knows the statuses red or green, while the SP500 ETF strategy works with varying position sizes. Partial sales are carried out selectively or the opening position is measured lower due to high volatility.
Who is this strategy ideal for?
1)
Investors with a medium or high portfolio volume who do not want to be very active on the stock market, who value capital protection and who still want to achieve double-digit returns
2)
Investors who are at at the beginning of their investing career and want togrow their money as quickly as possible. Our system is scalable. With an appropriate willingness to take risks and knowledge of the subject of leveraging, high returns can be achieved that allow the portfolio to grow quickly.
More about risk and leverage here .
Which ETFs can be used?
An ETF is traded on the SP500 (SPY). Alternatively, futures can be used on the SP500 (MES or ES).
We deliberately developed the strategy and opted for an index, the SP500, in order to exclude the risk of individual stocks.
Those who use European ETFs are confronted with a little less liquidity. Since the SP500 strategy has a "slow character", the lower liquidity will hardly have any effect or only in situations where a stop loss is used.
The performance of the European ETFs will vary by the euro / dollar exchange rate.
A selection of ETFs for the European market is available here: ETF search
More on the subject of ETF designation: ETF name decryption
The symbol SPY5 can be used at Interactivebrokers. Behind this is an ishares ETF. However, this has little liquidity.
You can find more about calculating the position size and the difference between future and ETF here: Calculation examples
This question is often asked:
I would like to participate in the SP500 strategy but the last entry signal is a long time ago?
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When should i get in?
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What percentage of my capital should I get in with?
With the SP500 strategy, the position size is occasionally adjusted, depending on the market situation.
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As soon as there is an increase in a position size, it is a good time to enter.
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The position size can be the suggested size
Performance Report
The Market Alert Index has impressively shown in the past that all major crises could be avoided in an excellent manner. This can be seen in the following performance indicators.
Long only
Long + Short
With a long-short combination, the system has achieved an average CAR of 23% since 1998 (see right side) with a 14% drawdown!
The short results:
