I’ve set up a virtual portofolio at marketocracy to trade components of the StockTwits 50 (St50). This goal of this fund is to outperform the St50 index. Components of this fund will be those in each week’s St50 as published weekly by Ivanhoff at http://stocktwits50.com/.
Seventy pecent (70%) of the portfolio, called “Accelerator,” is comprised of oversized positions in select St50 components. These positions are selected via technical analysis.
- Stock breaches noted support.
- Stock exceeds measured move.
- Stock appears to be exhausting a long-running trend.
- Extraordinary negative news.
- Industry Group peers of the stock substantively meeting above criteria.
- Removal from the index.
- To redeploy cash to more compelling opportunities.
Entry criteria include (but are not limited to):
- Stock is respecting (or has healthily bounced off) notable short-term support while in a longer-term uptrend is intact. (Support may be horizontal price or a lower channel.)
- Stock is reaching new highs after penetrating notable resistance.
- Stock is exhibiting notable (upward) trend strength,
- Industry group peers of the stock substantively meeting above criteria.
Thirty percent (30%) of the portfolio, called “Core,” will be comprised of even positions of the entire fifty components of the St50. The core will be rebalanced every Monday based on the new St50 as published each weekend.
Core entry criteria will be inclusion in the index.
Core exit criteria is removal from the index.
Each Core component entry position size will be 0.6%. Each Accelerator component entry position size will be up to an additional 7%. Core entry/exit will be full position entered as market trades. Accelerator entry/exit may be either full or in thirds entered at market or limit at the discretion of the portfolio manager. Overall market trends will influence the position and trade size in Accelerator – Core will always remain fully invested.
Note Marketocracy subtracts high trading cost and daily expense to the portfolio. “All executed fund trades will be charged a commission of $0.05/share, with a maximum commission charge of 5%. All funds will be charged an annual management fee of 1.95% (195 basis points) of assets under management. The management fee will be calculated and debited daily. Sales will be charged an SEC fee on the proceeds of the sale divided by 30,000.” Note also Marketocracy does not allow for stop loss orders.