I was blown away by your post when I read it. I had no idea you were actually trading the sectors.
I have thought trading sectors was a really good idea for many years. About 3 years ago I tried a scheme, but it did not work out. I was trying to stay fully invested in what ever sectors had buys, but the number of trades to rebalance each time I got a sector buy or sell was creating way too many trades. I had to drop it.
Fast forward to the last couple of years and I have fired all of my financial advisors and started doing all of my own trading. All I was using was SPY and TQQQ. I finally got to a point about 3 months ago that the pressure of making my trades was just getting to be too much. One wrong trade and I missed a big gain or took a huge lose.
So, I decided to start trading the sectors with a much-simplified method from what I tried before. I have been very happy with the results and the pressure of trading is gone. If I make a bad decision, it is only a smaller part of the total and I can easily correct the trade in a day or two if I need to with minimal damage.
I backed test 2021 and 2022 ytd. SPY gain in 2021 was about 28% and my sector trading gained just over 30%. But for 2022 which is now down about -17%, I would have been up 15%. This is perfect. If it is a very good year, this will match the market and if it is a bad year, it will out perform. It doesn’t get any better than that.
This matches my long-term trading goals of matching the market in a good year and not losing money in a bad one.
I my doing all of my trading off of daily charts where I see that you are using 60min charts. That seems like it would way too much trading for me, but maybe not. I will have to spend some time and look into that. How many trades a month are you making?
As you know I did take a renewed interest in your Bullish Percent (BP) charts and I have been tracking the SPX. I will have to take a look at BP for the sector charts. This could make a conformation signal to my trend line trades.
I am just trading the XL etf’s, XLB, XLC, etc. I don’t know about the sector etf’s that you are trading. I will also have to look into to that. But it seems that what I am doing is just as good.
I had just been waiting for the right time to introduce what I was doing to the board, so seeing your post this morning was a real surprise. I love it. Who would have thought.
As of this morning the only sectors that I am still long are XLRE and XLU. Correction on that, XLRE hit my stop this after the open.
I added your post to the stickies !!!!!!!