TSP | Thrift Savings Plan - Talk
Intrepid_Timer's Investment Strategies
Overview Of Intrepid_Timer's Trading Strategies
My trading strategies are based on my proprietary trading system, which I call GreensKeeper. GreensKeeper is a weighted system that tracks a basket of currencies and commodities along with the VIX, moving averages and proprietary timing patterns. I have backtested this system through 2005 and it has passed all my tests as far as returns and ease of use.
When applied to the Thrift Savings Plan (TSP), GreensKeeper becomes a low risk trading system because you are sitting in the G fund for most of the month. GreensKeeper will typically give two signals per month to enter the TSP equity funds. It will also give one signal per month to enter the F fund. When these signals occur, you will only be in each fund for approximately one week, on average. This means that in most months you will be sitting in the safety of the G fund about 50% of the time. Even though you'll be making about three IFT's per month between the G fund, F fund and equity funds, being in equities for only about one week per month actually lowers your risk compared to being in equities for long periods of time, like a buy-and-hold strategy (L funds), where you are at the mercy of the markets. Instead, you will be implementing your own risk management strategy by deciding when and for how long you are in the markets,
Because my system typically gives two, sometimes three, signals to buy equities per month, returns with TSP will ultimately depend on which signal is chosen to follow and how one allocates their IFT. One can either follow the signal early in the month or wait for the one later in the month. Over 80% of my systems TSP buy signals will produce positive returns so it's a good problem to have. I will post the allocation and go with the signal that I believe gives the best opportunity to make the highest return for the month. I also usually go 100% into one fund or another, but others may chose to diversify more into each of the other funds.
My strategy for trading ETFs and/or mutual funds is to purchase long funds when my system gives me a buy signal and to purchase their corresponding inverse short fund when I get a sell signal. Staying within the same family of funds is important with mutual funds because you can just exchange one fund for the other instead of buying and selling them. If you were to sell one fund, you'd have to wait for the funds to settle before you could use that money to buy another one. Staying in the same family of funds isn't as important with ETFs, but I usually do it anyway. Even though my trading system is based on the stock market as a whole, one index or one sector may outperform another on a short term basis and if you start switching between sectors or going from a broad based index fund to a more specialized sector, you may end up buying and selling at the wrong time. Not that this can't be profitable, it just makes things a little more difficult.
With my trading system, one could also trade individual stocks. However, I do not recommend this because individual companies have much higher risk than a sector or index fund with multiple stocks. If one really wanted to go this route, I'd recommend choosing several different companies to either long or short in order to lessen some of the inherent risk of investing in only one company.
The goal of my investment strategy with TSP is to average a return of about 2% a month or 24% per year, even during prolonged bear markets. This is possible because, even during bear markets, there is at least one opportunity in most months to make a quick trade and profit in the equity funds. My trading system helps to pinpoint these opportunities.
The goal of my ETF and mutual fund strategies is to make AT LEAST 50% per year, although they'll most likely do much better. This is possible by trading both long ETFs and/or mutual funds and their corresponding inverse short fund.
With my services, you can expect to have my system signal posted between 11:00am and 11:30pm EST whenever I get a signal change. I will also be posting a spreadsheet with my current signals and returns and provide some daily market commentary from the day's headlines and other pertinent information about investing and trading that I think may be important. I will also discuss questions that I may get in emails or PM's in case someone else may have the same question. This information will be posted between 9-9:30am EST M-F. At that time, I will give a preliminary “heads-up” as to rather or not I may be giving a signal change at 11-11:30am ET.
Please forgive me if I am unable to answer every email or PM, but I will do my best.
UPDATE on 01/05/2012: I have decided to make some changes to my Intrepid_Trending strategy. It will now become a 50% long term trend and 50% short term trend strategy. The first allocation change per month will come on the 1st trading day of each month with 50% going into which ever market was the best performing market in the previous month (F or S). This will leave one IFT for using the other 50% to buy the S fund when my Timer system issues it's first buy signal of the month for equities. When my Timer system issues the next signal , the Trending system will move that 50% S fund into the G fund and wait for the first buy signal in the following month. 50% will stay invested in whatever was the best performing market in the prior month. I hope this makes sense. It basically breaks one's TSP account into two separate accounts, one for trading longer term trends in either the bond or equities markets and the other one for shorter term trends in equities only.Using the Trending strategy in this manner, it will stay at least 50% invested in any longer term equities up trends, like we saw in 2009, and in the relative safety of the bond market (F fund) during longer term equities bear markets, like 2008. I will also only be using the S and F funds in determining which market did the best."
Explanation and History of Intrepid_Timer's Trading System
My trading system, GreensKeeper, is based on many different indicators and proprietary trading strategies that took me six years to develop. I first started trying to develop a trading system in 1995 after a couple years of studying the markets, reading newsletters and following other people's systems. During those years, I came to realize that there are a lot of “shysters” out there that don't know anything but are more than happy to take your money and give you a hand full of “you know what” in return. I also came across people who had good ideas and what seemed like good systems but they just weren't consistent.
The initial system I developed was based mainly on moving averages (MA's). I was tracking 2-day, 3-day, 5-day, 7-day, 10-day, 13-day, 20-day, 30-day, 50-day, and 63-day MA's. It had it's moments but didn't do all that great overall. It was better suited for intermediate to long term investing and not trading. When you have prolonged sideways action markets (goes up and down in a tight range), it really underperforms. In 2006 I started tracking the VIX along with the MA's but it didn't bring too much success either.
In May 2006 I started tracking the price of the dollar. As the dollar rises, the market typically drops and when the dollar falls, the market typically rises. This did show promise and I had some success with it in spots but it was inconsistent in the long term and prompted A LOT of trades. The TSP probably changed their IFT rules because of me that year................
Early in 2007, I came up with the idea of tracking copper. My thought process was that copper was a commodity that is used by pretty much all countries and all manufacturers but is cheap enough that they don't need to stockpile it, they can just buy it when they need it. If they start buying it, it will cause the price to increase because of supply and demand. This price increase would be an indication that countries and/or businesses were manufacturing autos, machinery, buildings, etc. This in turn would be an indication that business was good so profits would go up, the economy would go up and the market would go up. When the price of copper went down, this would be an indication that none of the aforementioned was happening. Again, I had some success with this also, but the inconsistency was still there.
Then came 2008. I was losing money left and right early on and had just about given up on the whole system thing. I was only posting my moves sporadically on the tracker because I wasn't doing well. In June of that year, I decided to go back to all my past data and see what I could do to try and improve things. That's when I decided to start using all my past indicators in conjunction in order to produce a buy or signal. My system started to perform better after this and it ended the year down only 5.56% according to the PIP on my yearly statement from TSP, despite the very slow start. I still wasn't satisfied with this even though the market as a whole was down around 40%.
In 2009 I was looking for ways to improve my system even more and in June I decided to add more currencies and more commodities to my data in order to stop the occasional false signals I was getting. My system started performing the way I expected after that and I ended the year up over 20%. Not quite the 24% I wanted, but with the additions I made in June, it would of easily exceeded that in a full year.
My trading system got off to a slow start in 2010 and I was close to the bottom of the autotracker after 2 months. I realized then that I was giving too much attention to some indicators over others. I also looked back over 6 years of data and noticed that there are certain times that are better to be long on stocks than others. I added this newly discovered information to the rest of my indicators and gave all of them a weighted percentage of my system's buy and sell signals. Currently my trading system is up over 28% for the year and exceeding all my expectations, even though my return is down about 12% from where it should be if I had started the year with the weightings strategy.
I will be adjusting these weightings periodically depending on how each indicator is tracking the market as a whole in any given time period. I believe the main thing wrong with most trading systems is that the creator is unwilling or unable to make adjustments to their systems. We all know that the market is a fickle entity so what may work one year, may not work the next. You have to be willing to adjust to it, it won't adjust to you................
DISCLAIMER: I am not a registered investment adviser and am not providing investment advice or recommendations to anyone. The information contained here is for educational purposes only. This information is being made available to show what is possible and what is not possible with the current TSP trading limits and with other investment resources outside of TSP. These TSP allocations and ETF/mutual fund buy and sell signals are purely hypothetical and past performance is not indicative of future results. I may or may not be using these securities at any given time for my own personal investments. Your investment losses and gains are your own responsibility. Please consult an investment professional before buying any investment security.TERMS AND CONDITIONS:
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