TradeSmith promised we’d crush it for you in the zero-commission brokerage war. In today’s Insider Update, we plan on doing just that.

To quickly review TradeSmith’s latest editorial, he examined the risks and benefits for investors associated with brokerages moving to a no-commission structure. For the undisciplined investor, this could turn your nest egg into a slot machine, needlessly betting on risky investments. For the disciplined investor, however, it presents enormous opportunity.

We’ll follow the GDXJ ETF as the example TradeSmith used yesterday. It’s the Junior Gold Miners Exchange Traded Fund. GDXJ has the goal to “track the overall performance of small-capitalization companies that are involved primarily in the mining of gold and/or silver.”

While GDXJ itself is in the SSI Green Zone, some of its component stocks are not. With the new zero-fee structure, you can treat ETFs like a dining menu. Instead of investing in the ETF with components that we know are not healthy, you now have an array of options, and you can go “a la carte” to find the best ones for you.

Today, we’ll show you how TradeStops can help you find the best components from an ETF to add to your portfolio.

Step 1: Adding GDXJ’s Component Stocks to TradeStops

Finding the components of GDXJ is simple. A Google search brings us to VanEck’s website, where the GDXJ holdings are listed. From there, we can download a spreadsheet of those holdings — being sure to save the spreadsheet as a CSV file for import into TradeStops.

Coming back over to TradeStops, we can import the holdings from the spreadsheet. If you’d like to follow along with our example, we’ve saved the CSV here for your convenience.

Once you’ve uploaded the CSV watch list to TradeStops, you can view all the holdings on the Positions & Alerts page. Of the GDXJ holdings we support (66 out of the total 74 components), 33 are either stopped out or in the SSI Yellow Zone. A surprising 50% of the ETF is either stopped out or correcting!

Now, the fun can start — finding the best holdings.

Step 2: Going A La Carte

Our most recent Educational showed you steps to trim down a large portfolio — remove any positions that are in the red or yellow zone, trading at a loss since entry, and that have a VQ that’s just too high for your investing style.

We ran our test GDXJ portfolio through these rules (using a 40% VQ as our max) and were left with just 22 positions. It is much easier to examine 22 positions rather than 66!

Now, GDXJ also contains some international positions. If you don’t like trading international stocks, or your broker doesn’t support it, you could remove those positions as well. In our test portfolio, we’d remove 14 stocks from the current list of 22.

That leaves us with just 8 positions.

GDXJ green watch list

Step 3: Position Size for Risk

If you like any of these positions, you could then run them through our Position Size Calculator to determine the optimal position size for you and your risk tolerance.

Position Size Calculator Equal Risk

If you have recently balanced your portfolio, you can even position size these new positions to be equal risk with the other positions in your portfolio (as shown in the example above).

Another option would be to use the Risk Rebalancer to add multiple positions to your current portfolio while staying equally balanced. Just run the Risk Rebalancer, and then click the Add Another Ticker button on Rebalanced Results.

Risk Rebalancer Adding New Positions

From there, all you’d have to do is type in the tickers you’d like to add and add any cash to facilitate the new trades.

Bulletin Board

If you’ve been following our Insider Updates, you’ll know we’ve been attending conferences across the U.S. If you were unable to attend any of the conferences we’ve been at, we’d thought we share just a couple photos.

Conference presence collage

But — our conference season isn’t quite over yet! We’d still love to meet you at an upcoming conference.

The Dent Research- Irrational Economic Summit — Oct. 10 to 12 at the Gaylord National Resort & Convention Center in Washington, D.C.

Three days of insights from D.C. insiders and Wall Street’s brightest to help you survive, and profit from, the looming chaos facing the U.S. and global economy.

We’ll host a FREE bootcamp training after this conference on Oct. 13. Our Product Education Specialist, Marina Stroud, will guide customers through a basic course on our products and answer any questions you may have. In addition, Heidi Shubert and members of our Customer Success team will also be there to help answer your questions and take your feature suggestions. However, seats are limited, so please call our Customer Success team at the number below to reserve your spot at the bootcamp.

Signing Off

With TradeStops, you can be a disciplined investor. With zero commission fees, it can be tempting to treat your nest egg like a slot machine, placing numerous bets and hoping for the best. By using the tools of TradeStops, you don’t have to place blind bets. You’ll have the knowledge and confidence to place smart bets only on the very best of the best.

As always, if you have any questions, please feel free to reach out to us. We’re dedicated to giving you the best experience possible with all our programs. You can reach us at [email protected].

Until next week,

TradeSmith Team