2015 has been an unbelievable year for TradeStops. I’m proud to say that we’ve made huge strides in our continuing quest to put powerful but easy to use tools into the hands of self-directed investors which helps you buy and sell stocks.
As the year draws to a close it seems a good time to review the highlights of all of the value that we’ve added to your services this year.
Re-Entry Alerts (Pro):
Finally there’s an answer to the question of when to get back in to a favorite stock after you’ve been stopped out (or even when to get into a stock that you don’t yet own). Our new Re-Entry alert combines our Volatility Quotient (VQ) with a proprietary trend indicator – the Smart Moving Average – to tell you when a stock has shown a strong bounce off of a bottom (a bounce greater than VQ%) and has established a new uptrend (has a positive Smart Moving Average).
Besides the obvious benefit of helping you to know when it’s safe to buy, there have been a couple of unanticipated benefits of the Re-Entry alerts as well.
I’ve heard from many subscribers that one of the main benefits of the Re-Entry alert is that it’s helping subscribers be more disciplined about following their original trailing stop sell signals. Simply put, it’s easier to say goodbye to a beloved stock when you know that there’s a way to get back in later on.
The second major unanticipated benefit is what the Re-Entry alert has kept us out of. Energy and gold miners, for example, are beloved sectors by many of us. Both sectors have been utterly destroyed the past couple of years. The absence of a Re-entry alert has kept us safely on the sidelines avoiding tremendous wealth destruction.
Smart Moving Average (Pro):
The Smart Moving Average was developed in support of the Re-Entry alert. It’s a proprietary trend indicator that identifies the unique moving average length that has best supported bounces off of a longer-term trend.
We developed it because we wanted to avoid getting duped by strong bounces off of bottoms that seemed like strong entry signals but that, more often than not, turned out to be false positives. Our original Re-Entry alert was just to wait for a bounce that was greater than VQ% as a re-entry signal but we found that it wasn’t reliable enough, so we developed the Smart Moving Average to filter out the strong bounces that weren’t supported by trend. The Smart Moving Average is the critical piece that kept us on the sidelines in energy and gold miners, for example.
In addition to being a critical component of the Re-entry alert, the Smart Moving Average can also now be viewed on charts in TradeStops Pro as a stand-alone indicator in support of your investment decision making.
I personally use it, for example, to help me decide whether or not to buy stocks that have dipped into their Low Risk Zone (see below). If a stock is in the Low Risk Zone and has strong support from its Smart Moving Average, I’m more inclined to buy it.
Low Risk Zone Alerts (Pro):
When I was explaining the concept of the Low Risk Zone to my colleagues Steve Sjuggerud and Brett Eversole of True Wealth fame, they commented, “Wow, you’ve finally quantified the idea of a pullback.”
I could have also called the Low Risk Zone alert the Goldilocks alert. It tells us when a stock has pulled back just enough to be interesting but not so much as to be in serious peril.
The reason that I decided to call it the Low Risk Zone alert is because it’s a point at which the stock is close to its optimal trailing stop level but not yet stopped out. When entering a stock at this point you can use a tighter stop than normal. You can lower your risk.
You can use Low Risk Zone alerts as low risk entry points into stocks of interest that have already triggered a Re-Entry alert. You can also use Low Risk Zone alerts as potential opportunities to add to positions that you already own.
Stock State Indicator (Pro):
The Stock State Indicator or SSI is the combination of Smart Trailing Stops, Re-entry alerts and Low Risk Zone alerts. At any given point in time a stock is always in one or another of the following states:
- Stopped out by its Smart Trailing Stop with no Re-Entry alert (yellow caution hand).
- Re-Entry alert triggered and not yet stopped out (green thumbs up).
- Re-Entry alert triggered, not yet stopped out and in the Low Risk Zone (blue index finger).
While the SSI is a combination of indicators rather than a new indicator itself, it does add a powerful new feature to TradeStops in allowing you to easily see at a glance where any position stands relative to our most powerful indicators.
You can view the SSI on any of your portfolio holdings in the Positions section of Position & Alerts. You can also view the SSI on any newsletter portfolios that you’re subscribed to and that we track in our Newsletter Center.
Newsletter Center (Pro):
Speaking of the Newsletter Center, I haven’t done a whole lot with it yet but I’m pretty excited about it. It’s something that I’ve wanted to do for years and this year it became a reality. I believe that it is a real milestone in the history of TradeStops.
For the very first time you can access your own portfolios and the open recommendations of your favorite investment portfolios both in one place – TradeStops.com. We’re currently covering equity focused portfolios from Stansberry Research, Oxford Club, Palm Beach Research Group, Agora Financial and Sovereign Society. I expect to add more publishers this year.
There is massive untapped potential in this new resource … so much so that I hardly know where to begin. I’ve long been a fan of the quality independent research that you can get from financial newsletters. I also became quickly aware of how hard it was to put all that research to effective use. Combining the tools of TradeStops with quality sources of independent research has long been a dream of mine. The Newsletter Center is a big step in that direction. Stay tuned for more to come here.
Risk Rebalancer (Lifetime):
I’ve been talking about this new tool a lot for the last couple of months … and for good reason. Of all of the tools I’ve ever developed, I believe it to be the single most impactful thing I’ve ever done. It brings together our ground-breaking work on the volatility of individual equities (VQ%) and the critical area of position sizing into a single powerful tool that can analyze an entire portfolio and show you where your weak spots might be.
I’ve written several articles about this over the last few months but I’ll say it again. The single biggest risk to the portfolios of individual investors is when you have a very large position in a very volatile stock.
Volatility by itself isn’t the problem. If you have a small position in a very volatile stock you’ll probably hardly even notice the volatility. The big problems come when high volatility is amplified by large position sizes. That’s when you’ll find yourself leaning over the rails of the cruise ship that is the stock market. That’s when you’ll make decisions you’ll likely later regret.
Making sure that position sizing takes volatility into consideration is a huge advance for investors. The new Risk Rebalancer lets you analyze any portfolio with the click of a mouse and guides you to position sizes that will put more of your capital into low risk stocks and less of your capital into high risk stocks.
As I’ve mentioned several times before, my back-testing on the portfolio decisions of real investors has shown this to be the most powerful driver of improved performance I’ve ever seen.
Wrapping Up:
In addition to all of the above, we’ve also:
- Upgraded the user interface and made it more mobile responsive (i.e., iPad friendly).
- Upgraded the servers that run TradeStops to improve reliability and page loading times.
- Improved the charts (more to come here soon).
- Added the ability to have alerts automatically added to new positions in synchronized portfolios.
- Expanded our coverage of online brokers for synchronized portfolios.
- Started regular free weekly editorial and market commentary from me.
- Hired incredible new talent to add even more value to TradeStops going forward.
All in all it’s been an incredible year of growth and value creation here at TradeStops and I couldn’t be more excited to build on these accomplishments in 2016.
Thank you all for your business. I look forward to continuing to grow together next year.
Happy New Year!
