Please help tune my investing strategy

[Sunder]

Hey guys,

I got a letter of offer, and so I am going back into the market, but as it's a new job, and a busier one than the last one, I can no longer do any kind of daily trading. I want to get a new strategy for investing longer term, rather than trading as I have before.

To ensure that this thread does not become one of financial advice, please do not mention any specific stocks, products, sectors or indices, and do not give any specific time frames. All I'm after is to try to find the indicators that suit my strategy.

That said, I'd appreciate any advice you might want to give.

My objective is to have my money in a low leverage index fund (maybe STW 50% geared) in such a way that I can basically leave it be, and just check the performance once a week or so, and either go all out, or leave all in. For that reason, it needs to be fairly simple and ignore daily fluctuations (get very few whipsaws).

I will also be adding in 3/4 of my wage every week, going in immediately 50% geared.

My thoughts for strategies are:

* 30 Day EMA
* MACD
* Wilder Directional Movement Indicator

Obviously, with a long term strategy, I don't care if I lose 10% here and there on lagging indicators, but I would hate to lose some of those 20-30% down slopes we've seen this year.

Any recommendations on other indicators or risk management strategies I would need for these objectives?

 

[awg]

deciding where to place your stop losses and profit targets will be your biggest decision IMO, especially due to gearing.

I expect plenty of Volatility still.

how often will you review your stops? daily?

lets us know yr thoughts on this topic

 

[prawn_86]

Why not look at picking up some bluechips that appear oversold, and buy for yeild?

That way you do not have to worry about gearing until the markets stabilise a bit, and with IR continually coming down, solid yeilding stocks are probably the only place that offer a positive real return. Then a few years down the track you may have some capital gains also...

 

[Sunder]

deciding where to place your stop losses and profit targets will be your biggest decision IMO, especially due to gearing.

I expect plenty of Volatility still.

how often will you review your stops? daily?

lets us know yr thoughts on this topic

I'm hoping whatever system I use, have a trailing stop loss. My intention is to write some software that will every night pull down the day's data, and figure out tomorrow's stop loss, and send me an email if it hits.

As I said, this is to be as "hands off" as possible, as I will be working 10-12 hour days, mostly on client sites without access to the Internet.

 

[awg]

well u can place conditional orders the night before, that way targets should be achievable without too much trouble, (say 20 minutes per night), so long as you dont have too many open positions.

only prob happens if u get gapped.

i too am looking at yield, especially FF, has been a mongrel of a game though.

I have been repeatedly stopped out, very soon after entry.

i try to get a BE stop in asap, having been burnt a little too many times

 

[SoBadAtTrading]

How about combining fibo and sto 12,3,3?

 

[Sunder]

How about combining fibo and sto 12,3,3?

I'm guessing that means fibonaci something and stochiastic something? I've never worked with those indicators before. Might do some quick reading.

What's the advantage of those to my situation?

 

[rub92me]

Start with risk management. Imho gearing combined with the 'hands off, only look at it once a week' approach is asking to be slaughtered with the current volatility. Down 10-15% in a week is entirely possible. If that happens you're out of the game pretty quickly.

 

[SoBadAtTrading]

I'm guessing that means fibonaci something and stochiastic something? I've never worked with those indicators before. Might do some quick reading.

What's the advantage of those to my situation?

My theory is, use the fib lines to show the level where a fallen stock might retrace back their prior losses which might fit into your long-term investing plan. The stochastic is very similar to the MACD, and i use the 12,3,3 settings to filter out stocks.

Indicators aside, risk management should be the main focus in the present climate.

 

[ASXNoob]

From a noobs point of view...i am also looking to get into an ETF like STW but my question is more of when i should buy in (has it hit bottom, is it trending up?) rather then when to sell. I was under the impression that you would be in for the long term to achieve gains reflecting the market average over a longer period. However with the market volatility? at the moment it wouldnt make sense to stay in if the market decides to fall further...