Introducing New Trading System: Rebound Stocks

Rebound Stocks uses technical analysis, market timing, and several proprietary systems, to pick good quality stocks that for one reason or another have been beaten up in the market.  When a buy signal is generated by my short term market timing system, a new campaign is initiated with the purchase of 7 stocks. When fully invested, Rebound Stocks holds a maximum of 7 open positions. During times when the system is not fully invested, funds are kept in the safety of the money market. 

Signals are sent during the evening hours for execution at the open the next trading day. Buy orders are placed with a simultaneous OTA order (one triggers another) with a 7% trailing stop.  (This system trades long only.  During sustained market declines, one or more inverse ETFs may be purchased.  Inverse ETFs go up when the market is going down.)

There are 3 ways that a trade may be exited: 

1. The stock hits and end of day gain greater than 20%. 
2. The stock hits its trailing stop. 
3. My short term market timing system issues a sell signal. 

Stocks that are sold during a campaign are usually replaced if market conditions are positive.  The system can be traded effectively with a minimum portfolio size of $7,000 with $1,000 being allocated to each of the seven trade positions. Capital gains are reinvested to take advantage of the compounding effect. Of course, larger sized portfolios can utilize the system even more effectively, since the brokerage commissions will represent an even smaller percentage of each individual trade.