Ten Greedy Men S&P 500 Bottom Feeders System (TGMBFS for short):
My hypothesis is that the highest market cap stocks in the S&P 500 are like the "bonds of the stock market" in terms of safety and that we should buy these stocks when they are available at a discount. This system focuses on identifying those stocks systematically, determines when and how many times to buy (multiple positions) and at what prices, and determines when to sell and at what prices. No human decision making process is involved in any of these decisions - I run a scan, place the scanned picks in a spreadsheet, and then the spreadsheet picks out the buying and selling strategies. Basically a black box of sorts. The other feature - no decisions are made during regular trading hours. You can go to work or whatever and go about your day during regular trading hours without taking any action until the evening. That said, no after hours or pre-market transactions are made. All buy and sell orders are placed with market, limit, and stop orders in the evening as specifically directed by the system, but are automatically executed during the trading day.
NOTE: This is not the discussion thread for the TGMBFS. Please do not clutter this up with questions, etc.
The TGMBFS discussion thread is located here:
https://10gm.forumotion.com/t36-tgmbfs-discussion-thread
You can see some historical backtest information and some limited forward tested data for this system here:
https://10gm.forumotion.com/t5-tgm-sp-500-bottom-feeders-system-historical-backtest
Performance of closed trades indicated in this thread are located here:
https://10gm.forumotion.com/t37-tgmbfs-performance-thread
System Tutorial:
1. Position size
It is recommended to take your total planned investment, and divide by 30 to determine your position size. For example, if you intend to invest $60,000 in the bottom feeders system, your position size would be $60,000/30 = $2,000. In reality, you will not be able to buy $2,000 worth of stock, it will really be $1,965 or $2,068 or something like that since the share prices are likely not an even number - not a big deal, just get as close as you can, you can round up or down depending what you prefer. Note that when the system is not actively investing your entire planned investment, it is recommend that you invest the rest of that investment elsewhere, rather than let all that cash just sit (I use VTI). Also, it may be possible that the system will contain more than 30 positions from time to time, it is not specifically capped at 30, but that is typically close to what you will have invested after 6 months.
2. Signals
Once my scan picks a stock, I will post the ticker symbol of that stock in the evening before 11PM. You should buy 1 position of that stock the next day at open with a one day order placed prior to open directing this purchase. The directions will simply state for example:
IBM(1) Buy limit order set to $150.
(This indicates to set a one day buy limit order to buy your 1st position of IBM for $150 or less)
3. Additional positions and sell orders
Once you intially enter a position indicated by one of the signals from item 2 above, it will be active. I will then post when and at what price to sell that stock using limit orders, and when and at what price to buy additional positions of that stock using limit orders. (1) means I am referring to position number 1, (2) means I am referring to position number 2 and so on. (1, $160.00, 30-JAN-2015) indicates that position was was purchased at $160.00 on 30-JAN-2015. Here are some examples:
A. IBM(1, $160.00, 30-JAN-2015) Sell limit order set to $180. IBM(2) Buy limit order set to $120.
This states that you currently have 1 position of IBM, orginally purchased at $160.00 on 30-JAN-2015. You are to set a limit order to sell it at $180. You will set a limit order to buy a 2nd IBM position at $120.
B. IBM(1) Sell limit order set to $180.
IBM(2) Sell limit order set to $160. IBM(3) Buy limit order set to $100.
This states that you currently have 2 positions of IBM. For the first position, you are to set a limit order to sell it at $180. For the 2nd position, you are to set a limit order to sell it at $160. You will set a limit order to buy a 3rd position at $100.
FAQ:
1. Q: Why did you pick stock XYZ? It appears to have bad fundamentals. A: I don't pick the stocks, the system does, and picks are based on technical information only.
2. Q: How do you scan for stocks? Please post your scan criteria. A: No, a lot of work went into this, but I will give you the picks and targets for no charge.
3. Q: Will stock XYZ in your system recover? A: I have no idea. If I knew, I'd mortgage off the house and invest in it.
4. Q: Why not just let your stocks run versus selling at their targets? A: Feel free to do so. I'd recommend a tight trailing stop.
5. Q: Why no hard stop losses? A: Stop losses = locking in losses.
My hypothesis is that the highest market cap stocks in the S&P 500 are like the "bonds of the stock market" in terms of safety and that we should buy these stocks when they are available at a discount. This system focuses on identifying those stocks systematically, determines when and how many times to buy (multiple positions) and at what prices, and determines when to sell and at what prices. No human decision making process is involved in any of these decisions - I run a scan, place the scanned picks in a spreadsheet, and then the spreadsheet picks out the buying and selling strategies. Basically a black box of sorts. The other feature - no decisions are made during regular trading hours. You can go to work or whatever and go about your day during regular trading hours without taking any action until the evening. That said, no after hours or pre-market transactions are made. All buy and sell orders are placed with market, limit, and stop orders in the evening as specifically directed by the system, but are automatically executed during the trading day.
NOTE: This is not the discussion thread for the TGMBFS. Please do not clutter this up with questions, etc.
The TGMBFS discussion thread is located here:
https://10gm.forumotion.com/t36-tgmbfs-discussion-thread
You can see some historical backtest information and some limited forward tested data for this system here:
https://10gm.forumotion.com/t5-tgm-sp-500-bottom-feeders-system-historical-backtest
Performance of closed trades indicated in this thread are located here:
https://10gm.forumotion.com/t37-tgmbfs-performance-thread
System Tutorial:
1. Position size
It is recommended to take your total planned investment, and divide by 30 to determine your position size. For example, if you intend to invest $60,000 in the bottom feeders system, your position size would be $60,000/30 = $2,000. In reality, you will not be able to buy $2,000 worth of stock, it will really be $1,965 or $2,068 or something like that since the share prices are likely not an even number - not a big deal, just get as close as you can, you can round up or down depending what you prefer. Note that when the system is not actively investing your entire planned investment, it is recommend that you invest the rest of that investment elsewhere, rather than let all that cash just sit (I use VTI). Also, it may be possible that the system will contain more than 30 positions from time to time, it is not specifically capped at 30, but that is typically close to what you will have invested after 6 months.
2. Signals
Once my scan picks a stock, I will post the ticker symbol of that stock in the evening before 11PM. You should buy 1 position of that stock the next day at open with a one day order placed prior to open directing this purchase. The directions will simply state for example:
IBM(1) Buy limit order set to $150.
(This indicates to set a one day buy limit order to buy your 1st position of IBM for $150 or less)
3. Additional positions and sell orders
Once you intially enter a position indicated by one of the signals from item 2 above, it will be active. I will then post when and at what price to sell that stock using limit orders, and when and at what price to buy additional positions of that stock using limit orders. (1) means I am referring to position number 1, (2) means I am referring to position number 2 and so on. (1, $160.00, 30-JAN-2015) indicates that position was was purchased at $160.00 on 30-JAN-2015. Here are some examples:
A. IBM(1, $160.00, 30-JAN-2015) Sell limit order set to $180. IBM(2) Buy limit order set to $120.
This states that you currently have 1 position of IBM, orginally purchased at $160.00 on 30-JAN-2015. You are to set a limit order to sell it at $180. You will set a limit order to buy a 2nd IBM position at $120.
B. IBM(1) Sell limit order set to $180.
IBM(2) Sell limit order set to $160. IBM(3) Buy limit order set to $100.
This states that you currently have 2 positions of IBM. For the first position, you are to set a limit order to sell it at $180. For the 2nd position, you are to set a limit order to sell it at $160. You will set a limit order to buy a 3rd position at $100.
FAQ:
1. Q: Why did you pick stock XYZ? It appears to have bad fundamentals. A: I don't pick the stocks, the system does, and picks are based on technical information only.
2. Q: How do you scan for stocks? Please post your scan criteria. A: No, a lot of work went into this, but I will give you the picks and targets for no charge.
3. Q: Will stock XYZ in your system recover? A: I have no idea. If I knew, I'd mortgage off the house and invest in it.
4. Q: Why not just let your stocks run versus selling at their targets? A: Feel free to do so. I'd recommend a tight trailing stop.
5. Q: Why no hard stop losses? A: Stop losses = locking in losses.
Last edited by Virginiabob on Tue Jun 02, 2015 10:11 pm; edited 9 times in total