Tradytics stock portfolios are pair-trading portfolios developed to augment the market returns on a consistent basis. These are designed with risk management in mind i.e they could have slightly lower returns in trend based markets, but will have significantly lower drawdowns during a trend reversal or choppy market. These could be used either in isolation or to augment your existing portfolios. Entries and exits are posted at the close of every day (if there's a potential play).

• Why pairs?

  We have had a massive bull market over the last decade. However, late 2021 onwards has given everyone a taste or choppy/bear market lately. Any portfolio that is designed for one direction might not work in the long run. We believe portfolios should be market neutral and should take both directions in account. Pair trading allows us to do that as we are always long and short some tickers.

• Leveraging with Options

  These portfolios are designed to be have good risk management, which comes at a cost of higher returns and volatility. They plays are also accurate about 65% of the time. If you have a higher risk tolerance, you can use calls and puts instead of buying and shorting in order to have higher leverage.

• Additional Due Diligence

  It is a good idea to spend 5 minutes looking at the price chart before you enter a position. A good tip to analyze these pairs is to go to Tradingview.com, and type in the pair as SYMBOLBUY/SYMBOLSELL and analyze the chart. For instance, if we are buying XLK and shorting XLRE, you can type in XLK/XLRE in Tradingview to analyze the trend & chart for the pair.

• Trade the pair

  These are pair trade portfolios and should be strictly followed as such. You have to enter into both a long and a short position given in the idea. You cannot pick one leg, that will not work.

• Max Stoploss

  A stoploss of -5% should be set for all trades.

• Position Sizing

  During backtests, we took each position with a capital of 500 dollars i.e 1000 dollars per pair. When using these for your account, please make sure that none of your pair positions are larger than 2-5% of your overall account. For instance, if you have a 10k account, you cannot invest more than 500 dollars per an entire pair i.e 250 dollars per an individual trade. This should be done in order to avoid periods where there are continuous losses in the portfolio. We don't want to be losing our entire account in a few trades. Keep a small size relative to your overall portfolio allows you to limit losses and slowly build up your account.

• Trade Timing

  Only enter and exit at or close the prices given in the trade idea. The best way to do that is to open this page before the day close i.e before 4PM EST, or at open next day.

• Too many plays?

  You do not have to go into all plays, a random sample, or your favorite pairs should be enough as well.

• Fees

  Slippage, borrow fees, and any other fees are incorporated in the backtest to have a more practical measure of performance. We slightly add a small fee in bid and ask prices to add synthetic slippage in the trades.

That's it. These simple rules should help you prevent any large drawdowns, and consistently make a good income in the markets. Please know that although we have done our best to ensure good performance, past performance is not a predictor of future success. Do your own due diligence, and consider these as more of trade ideas that direct plays.