I’m going to call this Simulation 1, and am asking my robot friend Sim1 to implement my sells and buys. Sim1 will sell if we hit a 10% stop loss below the purchase price or if the price goes below the 50dma. So let’s kick things off.
Below is what Sim1 bought today, and the stop loss prices he set.
Ticker
Name
Amount purch
Buy price
Shares purch
Stop price
ASPN
Aspen Aerogels Inc
$ 9,972
$26.52
376
$23.87
FOUR
Shift4 Payments Inc
$ 10,017
$76.47
131
$68.82
MELI
MercadoLibre Inc
$ 10,050
$2,009.93
5
$1,808.94
META
Meta Platforms Inc
$ 9,808
$518.23
19
$466.41
MO
Altria Group Inc
$ 9,975
$54.78
182
$49.30
NU
Nu Holdings Ltd
$ 10,004
$14.19
705
$12.77
ONON
On Holding AG
$ 9,978
$45.12
221
$40.61
TTD
Trade Desk Inc
$ 10,009
$103.08
97
$92.77
UBER
Uber Technologies Inc
$ 10,007
$72.15
139
$64.94
ZETA
Zeta Global Holdings Corp
$ 9,988
$25.61
390
$23.05
Cash
$ 193
Total
$ 100,000
We’ll update this simulation to report any buys and sells, and keep track of the returns.
We will buy if there is cash available following a sell, market conditions are right, and we find another suitable stock in a Stage 2 uptrend. Market conditions are right if we can find many such Stage 2 stocks. For more on Stage 2, see Trading With Stage Analysis
I’ll be interested to see how the stops work out. Years ago I spent a lot of time trying to find a mechanical way to set a stop loss. Never found anything that worked well. Mostly reduced gains.
Yes, I’m sure I’ll be leaving money on the table with the stop losses. That’s OK. With swing trading, I won’t capture the exact bottoms, and I won’t get out at the exact top. That’s OK, too. This style of trading was made popular by market wizards like Stan Weinstein, William O’Nell and Mark Minervini, among others. You can read their books and see if this style is for you for a part of your portfolio. Don’t bet the house with this.
Sim1 (the robot) woke me up to let me know that we were stopped out of ASPN on Friday. He never sleeps, whereas, as a retiree, I sleep in every day . He also prepared an update on the current holdings in the simulation. (He’s so thorough!)
Well, I started this simulation early last week, which turned out to be one of the worst weeks for the market this year. Great timing on my part, huh? However, the market staged a comeback rally this week, and I now see that we’re UP 2.8% since our start date (vs. +2.0% for the S&P 500). Winners so far include FOUR and ONON, both up about 8%. The only loser is MO, down 3%.
I asked Sim1 how he felt about having beaten the market so far. Unfortunately, he’s a robot, so he just gave me a long blank stare He has no emotions, whatsoever. HAGW!
Trade alert. SIm1 is selling MO (it’s been weak and touched 50dma) and buying back shares of ASPN with the proceeds. ASPN is again crossing above its 50dma. Sim1 is currently up 3.4% since inception on September 5.
Breaking: the Fed just cut rates by 50 basis points. Our stocks are reacting well to the news so far. That being said, the last half of September has seasonally not been great for markets. We continue to have our stops in place.
Well, just 3 weeks after we started this journey, we are up 6.2% while the S&P 500 rose 3.1%. Our 2 biggest winners are up over 13%. There are no losers. To protect profits, sim1 will be moving our stop losses up on any stocks that gain 15% or more. I’m pleased with these results, but anything can happen in the short term, which is why these stop losses are in place. To celebrate this market-beating performance, I was going to take sim1 out for a beer, but forgot that he’s a robot and doesn’t drink Here are our current open positions and performance numbers.
Sim1 is a set of trading rules for stock selection, risk management, and profit taking that can be implemented and executed by a robot. I’m sharing the results here monthly.
Thank you very much, I love experiments like this. I was just curious about what you used to set alerts and execute trades e.g. Think or Swim, IB, or the like. Also, are you paper trading or is this real money?
Alert - ZETA is now up over 16% since our purchase on Sep. 5. To protect profits, we are moving up the stop to $26.78. Still continuing to hold 100% of this position.
In other news, UBER was initiated at ‘Strong Buy’ at Raymond James with a $90 price-target, citing autonomous driving upside.
Analysts are falling over themselves raising their price targets for ZETA. RBC raises it to $34, Truist raises to $35 and Craig Hallum raises to $37.
“The analysts believe Zeta’s expansion into new product offerings and its collaborations with industry partners will enhance its total addressable market (TAM) and create additional growth opportunities. They also highlighted Zeta’s potential for continued outperformance and multiple expansion, comparing it favorably to SaaS peers that trade at higher multiples despite similar growth rates.”
September is supposed to be a weak month for the market. Yet, we’re now up 6.7% at the end of the last full week of the month. I’m pleased with this result, especially since the S&P 500 is up 3.7% in comparison. I didn’t expect to beat the market by this much so soon especially since our start week was one of the worst weeks this year - but I’ll take it. Let’s see what the last quarter of the year brings. HAGW and GTLA.
. He also prepared an update on the current holdings in the simulation. (He’s so thorough!)