You’re committed to more success as an investor, so you signed up for TradeStops cutting–edge portfolio management tools. And you’ve imported your positions into a portfolio. Good job!
Here are the answers to a few questions you might have, with some tips to help you optimize your portfolio like a real pro.
To do that, we’ve set up a sample portfolio that has been synchronized with TradeStops. Here is a list of the stocks in that portfolio.
The “Green” stocks are in the best possible position to move higher. It’s not easy for a stock to enter the SSI Green Zone and, once it does, the upward momentum could last for a long time.
The key thing here is to be sure you have trailing stops on all your positions. You might want to consider entering SSI Stop Alerts on these positions. There’s more information about the Stock State Indicators here.
OK, now what about your stocks that are in the SSI Red Zone. Should you just automatically sell those and start over?
Not necessarily. There can be any number of reasons to hold onto these stocks. For instance, let’s look at the position in Barrick Gold (ABX). This is the most volatile stock in the portfolio.
Yes, it’s in the SSI Red Zone, but you still might want to have exposure to the gold mining sector. Perhaps it was recommended by a newsletter that gave you good reasons for owning it.
For these kinds of situations where you determine that you’re going to hold onto a stock that is in the SSI Red Zone, you should consider using a Volatility Quotient (VQ) trailing stop. Here’s information on the VQ.
What about the other two stocks that are in the SSI Red Zone?
The best way to handle those would be to look at each individual stock. We’ll examine General Electric (GE) first. Click on the GE ticker symbol and a new page will open that has a chart of the stock.
It’s easy to see that GE has been trending down for quite a while. And this downtrend is occurring during a strong bull market. Unless you think this is the best stock to own, you could probably find another stock that’s in better shape.
But what about Gilead? That chart looks different.
Gilead is still in the SSI Red Zone, but its price has moved higher off the lows that occurred a few months ago. It could still take some time before GILD moves from the SSI Red Zone to the SSI Green Zone.
If you decide to keep this stock, you might want to consider using a VQ trailing stop as your stop loss strategy.
Bottom line: using TradeStops is a process, not just a single event. You don’t have to know everything all at once to be able to effectively use TradeStops to manage your portfolio.
If you take just a few minutes each week to learn something new on the TradeStops site, you’ll be an expert in no time.
Before making any changes in your account, you should take your personal financial situation into account. This includes the potential tax implications of selling positions and the costs to make the trades. We can’t make those decisions for you.
Our new members who look at this as a process will have the most success integrating TradeStops into their day–to–day investment success.
Tom Meyer
Education Director, TradeStops
