Two months ago, we introduced the Kinetic VQ strategy to our members. This easy-to-understand strategy can help you find winning trades in any market environment.

We begin by searching for stocks that have a higher current Volatility Quotient (VQ) than their long-term Average VQ. And the stocks must currently be trading in the Stock State Indicator (SSI) Green Zone.

Why does this strategy work so well? It’s really quite simple.

When a stock has a higher current VQ than its historical average VQ, it’s an indication that there is extra “worry” built up in the stock.

When that same stock starts a new uptrend, that extra worry acts like rocket fuel for the ensuing uptrend because it means that it’s easier for the stock to defy expectations to the upside.

Last week, we showed you that in the one month since introducing the strategy, the return of all the Kinetic VQ trades we posted on the Ideas by TradeSmith website outperformed the S&P 500 by a large margin. It’s a short period of time, but very impressive nonetheless.

Kinetic VQ vs S&P 500 Total Return

Kent N., a Lifetime member of both TradeStops and Ideas by TradeSmith, decided to put the Kinetic VQ strategy to work for him.

In his words, here’s what he did…

Here is my experience with Ideas by TradeSmith Kinetic VQ stocks.

On May 7th, I picked 5 stocks from the Kinetic VQ list: HES, I, NE, MRO, & X. I bought bull call debit spreads on three, HES, MRO & X (expiry 6/15/18) and purchased the stock outright for the other two. I put $5k in to each trade.

Yesterday I closed the 3 call spreads and sold NE. I have held on to the fifth stock (I) because it is up 40% and the chart looks great.

All told I am up over $7k on my $25k investment, a 28+% return in 4 weeks!

I am very happy I purchased a lifetime membership!

Thanks for all that you do to help the average investor!

Best,
Kent

The stock that Kent is still holding is Intelsat (I). After being in the SSI Red Zone since December 2017, Intelsat triggered a new SSI Entry signal on April 24 at $10.02. Since then, it has moved up almost 50%, and closed yesterday at $14.84.

Chart 2

Why did Intelsat qualify as a Kinetic VQ trade? The historical average VQ for I is 38.4%. The current VQ is 62.2%. That makes the current VQ 62% higher than its average VQ.

The VQ for I makes it a stock we consider having sky-high risk. It’s not for everyone. But Kent didn’t put all his money in one trade. He used five different tickers and two different investment strategies with stocks and options.

And his performance has been outstanding! Congratulations, Kent!

We’d like to know how you’re using TradeStops to achieve investment success. We’ll share stories similar to Kent’s over the next several months. Please send your stories to [email protected].

We’ll continue to report on the results of the strategies we’ve developed — including the Kinetic VQ and the Low Risk Runners, which can be found here and here.

Look forward to hearing about your successes,

Richard_Signature

Richard Smith, PhD
CEO & Founder, TradeSmith