The KISS strategy (Keep it Simple Stupid)

[jaeger]

imported post

One of the best way to invest in the TSP account is to find first the equivalents of the stocks then use the SMA. The equivalents can be found atwww.fundadvice.com .Do a site search under TSP in this web siteand I believe the second article has the equivalents. Go to yahoo.com input the stock equivalents (in their financial section). On the left side click on Technical Analysis, and input 20 day and 50 day on the upper left side of the chart. I like to keep the time frame to 3 month and then hit the large (upper right of the chart). When to buy is when the stock crosses the 20 day moving average and is going up. I usually add 5 trading days to the crossing to prevent to many trades. When to sell I usually use the 20 day moving average crossing plus 5 days, when the stock price crosses the 20 day moving average going down until I have held for about 1 month, then I go to the 50 day moving average to sell. Usually,in a move severe correction, I will use the 50 day moving average to sell after the 20 day moving average crosses it and is higher than the50 day moving average. Set this up under favorites so you have quick reference to them. Check once a week.

Which fund to invest in? The onethat crosses first, initially. Then the trick is to put your money into the fastest "horse" in the race. How to find the fastest gaining fund? Go to www.stockcharts.com. On the leftside of the page enter perfcharts. This is short for performance chart. Enter the 5 funds, F, C, S, and I. I do it in this order to keep them straight. It is the same order that is on theTSP home page fromleft to right. (Might helpyou keep them straight also). Hit GO on the bottom and your chart appears. This will show you the percentage change of the equivalents. Move the lower bar to the far right and make sure 20 days is in the bar. This is the last 20 day percentage gain or loss of each of the equivalents. Wait tillone has given a clean break from the rest of the pack for the past 10 days (anything over 2 percent is fine). Invest in that one. In 2004 both Sand I were neck to neck for the majority of the time. In that case split 50/50 till one or the othersurpasses the other. In earlyMay of 2005 both C and S crossed about the same time ie. 50/50 but later S became the lead (ie. invest 100% in S).

Save all your charts for future reference in your favorites. Weekly I check the Perfchart first. This gives you a snap shot of all thefunds (are they going up, flat-lined, or in a free-fall). Then check with the past 20 days to see if you arestill in the"leader". If they are falling or flat-lined. I will then go to the individualequivalent and make a decision, buy or sell. It takes less than 5 minutes a week.

 

[jaeger]

imported post

My mistake. Set up all allocations to the G Fund. When you buy it will sweep this fund into your Fund choice. When selling I mean to put 100% into G Fund.

 

[vectorman]

imported post

jaeger wrote:

My mistake. Set up all allocations to the G Fund. When you buy it will sweep this fund into your Fund choice. When selling I mean to put 100% into G Fund.

Hi jaeger, welcome, thanks for the tip. Would you consider starting an Account and Account Talk here, so others can gauge how your system is working for you. Thanks.

 

[jaeger]

imported post

newbie at this site vectorman. Not familiar with account. Would not mind assisting with the basic strategy. Would appreciate assistance with the account and discussion.

 

[FUTURESTRADER]

imported post

wall of worry still being climbed...anyone waiting for a pullback has got to nibble in at least...catch a little of the uptrend...could be over COB today...or next hour. I like 25% chunks into sector rotation essentially...DWCP starts rolling over (falls out of overbought) move 25% in to G or I if that looks good. C follows I up or down to lesser extent so I don't trade C...so nibble...5% or 10%..if you're wrong..no big whoop..but if your right, you at least catch some.

 

[smalltalk2k]

this is an interesting strategy. I don't have the technical analysis skills but I was wondering how this strategy would work out if someone tested this theory out using back data.

What worries me about it is how share prices of buying and selling would affect this strategy, since, (it seems to me) that you are always trailing the performance.


this is a bit over my head but I just wonder how the performance method would work over a back test. I myself have always thought that going for performance in the funds would be a good way to invest but I'm just not knowledgeable enough to figure these things out.

 

[fabijo]

I noticed a couple of weeks ago that if you followed the slow stochastics indicator, it keeps you out of the funds during disasters. I checked stockcharts.com and used the $spx chart (S&P 500) for times like the crash in 1987, the drop around 9/11, and a few other random big market drops. If you strictly followed the slow stochastics indicator by getting out when the black crosses below the red and got in when the black crosses above the red, you'd have been saved from those huge drops, even the Black Monday of 1987.

Not only that, but looking at the MSCI EAFE Index ($iee on stockcharts.com), which the I Fund tracks, you could have amplified your gains over the past years' bull market because it would have gotten you out during the significant dips and right back in during the uptrends. You'd also be saved from the recent drops going on.

Anyone have any thoughts on this? I know that we cannot truly get in and out immediately because we need to make our decision by noon. Even though I can look at the charts and see that it works, I never seem to be disciplined enough to follow it. I'm always finding myself making guesses about market movement. If only I was a robot without fear or greed. Maybe I can write a program that will automatically do my trading for me and I'll only check on the progress every few months or so - yeah right.

 

[nnuut]

Fabijo,
Very interesting at the least. Basically that is what I try and do. Be in when the markets are up and out on the downs, don't most of us wish we could do that. Never heard of the slow stochastics indicator, but I will definitely check it out. If it works like you say the only thing it can't catch is the unpredictable, and as you know we get lots of that, agreeably most are spikes or 1% or 2%+ but don't last, most of the time!!! Sometimes a unpredictable incident happens and initiates a big drop or starts a correction. It's never easy, but I just can't sit by in one fund while it fall through the bottom, waiting for it to correct. What's up with that way of achieving capital preservation? Run for the hills, "G" or the "F sometimes, it only makes sense. Soooo I'll check it out, good post!!
NNUUT

 

[fabijo]

Fabijo,
Very interesting at the least. Basically that is what I try and do. Be in when the markets are up and out on the downs, don't most of us wish we could do that. Never heard of the slow stochastics indicator, but I will definitely check it out. If it works like you say the only thing it can't catch is the unpredictable, and as you know we get lots of that, agreeably most are spikes or 1% or 2%+ but don't last, most of the time!!! Sometimes a unpredictable incident happens and initiates a big drop or starts a correction. It's never easy, but I just can't sit by in one fund while it fall through the bottom, waiting for it to correct. What's up with that way of achieving capital preservation? Run for the hills, "G" or the "F sometimes, it only makes sense. Soooo I'll check it out, good post!!
NNUUT

It doesn't really "predict" anything, but the theory behind the stochastics indicator is that in an up market, the closing price of the day should be closer to the high of the day - in a down market, the closing price should be closer to the low of the day. Here's a nice little explanation behind it:

http://www.investopedia.com/articles/technical/073001.asp

The indicator will not have you in at the very bottom of the low, nor will it have you out at the top of the high, but it seems to do a pretty good job at indicating short term downtrends and short term uptrends - at least with big indices. And alot of the big drops happened a couple of days after the slow stochastics indicated to get out. I think that an event that gives a huge loss mostly happens when the market has already been on uneasy terms. Now once you start talking about volatile stocks, the indicator really gets whacky looking.

 

[Spaf]

I noticed a couple of weeks ago that if you followed the slow stochastics indicator, it keeps you out of the funds during disasters.......

Anyone have any thoughts on this?....... I know that we cannot truly get in and out immediately because we need to make our decision by noon...... Even though I can look at the charts and see that it works, I never seem to be disciplined enough to follow it. I'm always finding myself making guesses about market movement........ Maybe I can write a program that will automatically do my trading for me and I'll only check on the progress every few months or so - yeah right........

To keep your funds out of disaster, manage your own funds, use index funds, have a entry and exit strategy i.e., stops, and understand the fundamentals (economics) and technical analysis (charts and indicators) for the market.

Use several indicators (MACD, RSI, STO, CMF, etc) but don't use too many otherwise they will get you paralized.

You can get in and out immediately. However, you need a internet broker account (TD Ameritrade, Scottrade, etc. etc). TSP is a government saving plan for retirement [Rabbit vs Turtle].

Don't guess! Educate yourself with trading. Try "Trading for Dummies".
Make a strategy! With rule #1. Never sell low, and never buy high! and sell Dogs!

If you make that program, and it works! Don't tell anyone, but send me a PM immediately....[Partner]..........Regards........Spaf

 

[fabijo]

Well, now I am kicking myself in the butt, because I have yet to actually do what I said I should do using the stochastics indicator. Yesterday, I went through the year, starting in January, and looked at the dates that the indicator showed it was good to get out and get in. Then I assumed that it may take a day to actually decide on following it - also counting that it would take us a day to make the trade. I used the I fund for my test. Using the charts and the TSP rates on each of the days, it looks like year-to-date returns would be about 19 to 20% so far.

I'm currently in G Fund. I'm gonna wait for the next dip and get into the I fund when the stochastics indicates to do so. Hopefully the market doesn't suddenly crash right after I get back in!!

 

[FUTURESTRADER]

hi fab,

I do that myself with slow stochs and macd histo, if they're both trending up/down, I trade respectively. Trouble is, about half the time, it's after the noon deadline. So you have to go on the signal from the previous afternoon in a lot of instances, and that can be instinctually difficult to do. I think they still give you a good idea of the trend. I.e., 25% out if stochs turn down, second 25% out if histo turns down.