Volatility Model - (Beta) Model moves to CASH/NEUTRAL on December 3, 2015

Published : December 3 2015 at 12:23 ET

The model has moved to CASH. This means to sell any normal or inverse ETFs you may have bought when the model switched a buy or a sell signal.

A fail-safe kicked in so the position should be closed about breakeven.

As you can see, the model is quick to cut losses, often to within -1.5% or less. In this case, the stop was moved up so the trade was closed roughly breakeven. This keeps even a string of losses small. Meanwhile, the profitable trades have shown in tests to well outperform the small losses over any given year. As members may remember, in late October, a 1x ETF such as VXX jumped more than 20% in just two days. That said, keep in mind that all trading strategies go through drawdowns and periods of non-profitability.

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