Trading Auto Signal

THE Trading Auto Signal aims to achieve positive performance in bullish, bearish or flat markets. It tracks the S&P 500 and can be used to trade both the upside and downside of this index, but also to take positions at the right time on other values, such as stocks paying increasing dividends.

The Trading Auto Signal ideally complements the 4 Dividend Growth StrategiesThe combination of all of these makes it possible to obtain a diversified portfolio, with little volatility, little subject to currency risk and little influenced by the vagaries of stock prices.

Objectives of Trading Auto Signal:

trade the S&P and generate capital gains, mainly in capital (interesting from a tax point of view in Switzerland)

cover positions during bear markets

reduce the volatility of a portfolio

deliver absolute performance, regardless of market conditions

choose when to buy (or even sell) stocks that pay increasing dividends

How to use Trading Auto Signal:
Here are the three typical configurations:

Dividend Growers Only: buy the dividend growth stocks with the best ratings and get rid of the worst dividend payers based on market signals. The Trading Auto Signal tells you which dividend growth stocks to trade. If you don't have access to NYSE Arca ETFs, don't want to use them, or the broker charges high transaction fees, this is the ideal approach.

Dividend Growers & ETF Short : like the first method described above, by additionally hedging with an ETF that plays the market downwards. This approach also allows the money earned with the ETF to be reinvested in dividend payers when the signal turns positive again.

Dividend Growers & ETF Long/Short: like the first two methods by taking a long position when the signal anticipates a market rise. The profits made with the bearish ETF are reinvested in the bullish ETF and vice versa.

You can also choose to trade only ETFs, without going through dividends. This can be done in a bullish position, a bearish position, or in both directions.

With which broker?
If you limit yourself to option 1 (Dividend Growers Only), any financial institution will do, since we are not in a trading approach, but an investment one. However, prefer intermediaries that do not charge too much custody fees. More info here.

On the other hand, if you choose the other variants, opt for your purchases/sales of ETFs, for a broker with low brokerage fees and which allows you to trade NYSE Arca ETFs. No need to be with an intermediary allowing you to make short sales. The selected ETFs allow you to simply play in the direction of the market or in the opposite direction. We recommend Interactive Brokers, who charges only 1$ per order (up to 200 shares). This is the body we use.

Which ETFs to use?
It obviously depends on the risk that one is able to assume. The higher our propensity for risk, the greater the profitability that one can expect. If the broker applies high commissions, it will also be necessary to bet on leveraged ETFs, or invest more capital.

The Trading Auto Signal has the advantage of systematically adapting the risk according to the market. It therefore offers you each time the ETF, bullish or bearish, with the most appropriate leverage according to the risk and the potential gain. So if you do not want to take too much trouble, simply follow the instructions of the signal. Otherwise you can choose to trade only one pair of ETFs. In short:

Automatic (ETFs indicated by signal) ⇒ recommended and used here
Best risk/return ratio
Beats the market by a wide margin with less volatility
Requires an intermediary with transaction costs less than 0.6%

Only the pair SPY (1x) / SH (-1x) ⇒ for cautious investors
Low risk profile - no leverage
Beats the market significantly with less volatility
Requires an intermediary with transaction costs less than 0.5%

Only the pair SSO (2x) / SDS (-2x) ⇒ use with caution
High risk profile - with 2x leverage
Beats the market very clearly, with similar volatility
Requires an intermediary with transaction costs less than 0.75%

Only the pair UPRO (3x) / SPXU (-3x) ⇒ risky and not recommended
Very high risk profile - with 3x leverage
Very high performance at the cost of great risks
Requires an intermediary with transaction costs less than 1%

When/how to trade the Trading Auto Signal?
You receive an email around 7:00 a.m.^* when the signal changes (on average 3 to 4 times a month). It indicates which ETF to trade, as well as the growing dividend positions that can be bought or sold. All you have to do is place your orders before the stock market opens. With the mobile application ofInteractive Brokers Available on Android or Apple, it only takes a few seconds to do what you need, wherever you are.
^* CET/GMT+1 in winter, GMT+2 in summer