NDX Rotation Strategy FAQs

- The portfolio of 5 stocks is rotated once per month based on ranking
- Stocks may be sold before the rotation day if the stop loss has been hit (about 20% of the time)
- About 30% of the time a stock is held longer than 1 month
- You can expect to make 6 or 7 trades per month with this strategy
- The strategy has two modes: risk on and risk off
- A macro indicator is used to determine the current mode
- When risk on, the portfolio is invested in stocks
- When risk off, the entire portfolio is moved to cash or a cash equivalent
- It spends about 77% of its time in risk on mode
- This is not an intraday strategy -- decisions are made based on end-of-day (EOD) data and are executed the following morning

- The cash equivalent is an investment that historically has low or negative correlation with the stock market
- Typical investment for cash-eq is TLT (20+ year bond fund)

- Market-On-Open (MOO) orders are used for all trades
- Trades are placed before market open and are filled when the market opens at the opening price for the day
- BTO (buy to open) orders are used to enter new positions
- STC (sell to close) orders are used to close current positions
- CLOSE orders are included to sell any stray positions that may be holdovers from previous trades, etc.

- Nasdaq 100 and TLT.

- The current holdings will be detailed in the comments section on the trade signals page

- CLOSE signals will handle selling any stray signals that may be holdovers from earlier trades (if using automation)
- To sync your holdings you can enter an MOO order for the appropriate portfolio percentage or you can wait until the next monthly rotation day

- Risk on: 5 stocks maximum, 20% allocation to each position
- Risk off: cash or cash equivalent 100% allocation

- No but it will make trading easier since it will allow for simultaneous buying and selling right at the market open
- In a non-margin or retirement account, buys may need to be delayed a few minutes until adequate buying power is available