Frequently Asked Questions
This model has generated very impressive returns, both from great trade signals and from consistent application of the rules. As with any automatic rules-based system, there will be times when it is easier to follow the signals and times when the signals might not make as much sense. As a general rules of thumb with any trading strategy, we have found that most traders lose their discipline for two main reasons:
#1. They trade positions that have too much risk and this leads to incorrect trading decisions such as taking profits too soon, selling to prevent losses at the wrong time, or being afraid to enter new trades. The best way to overcome this problem is to start slowly.
#2. They don’t understand and believe in the trading rules of the system.
We have intentionally tried to keep the rules fairly simple to follow to help overcome some of these issues. We recommend that you start slowly to develop your trust and belief in the strategy. One day’s or even one month’s performance will not always be representative of the types of return or trading characteristics you can expect. You do not need to start with real money, and you certainly do not need to start big! Building bigger positions is easy once you are comfortable and knowledgeable about the system. The most important part of getting started is finding the right low risk way for you to begin. The questions and answers below should help you towards that end. The information in the “How to Use The Model” page will also be helpful.
How do I start my portfolio?
It’s very easy to start a portfolio and you can do it at any time.
Please read the information presented on our “How To Use The Monthly Model” page to see how to get started.
The specific calculations to start a portfolio can be found on our “Starting A Portfolio” page.
We are not a brokerage. That means you will need to make your own trades in your own brokerage account. We only provide education by showing you how our strategy and model performs and what actions it takes.
Where are my alerts?
Don’t worry, when you signed up for the All Stars you were automatically added to our alert system. You will receive all alerts from the model portfolios.
But that doesn’t mean you’re going to get alerts all the time. You’re only going to get an alert when there’s a need to buy or sell.
For the monthly model, alerts will come the first day of each month. And then throughout the month you’ll get alerts as various stocks hit profit targets or stops. For the active/options models, it may be more frequent.
Remember, this is real investing with a professional strategy. Multiple professional institutions use these same systems to help manage hundreds of millions of dollars. So we’re not going to send out a bunch of alerts just for the fun of it. We’re focused on profits and nothing else.
What about text alerts?
You can sign up for text alerts here. There’s no confirmation text once you sign up, but rest assured the alerts will work. If you don’t receive a text within the same day as an email alert, just shoot us an email. And please remember that email alerts will arrive faster than text alerts. Don’t be alarmed if your text alert is delayed by an hour or so. This is okay, because the All Stars is a long term system.
What if I’m starting a new portfolio and multiple stocks have hit their targets? And they’re far away from their entry prices? Do I still enter those?
You can trade the All Stars however you would like, but the new portfolio calculator (found here) takes into account all the targets that have been hit and adjusts the starting percentage allocation accordingly.
So it doesn’t matter where the stock price is, or if it’s higher than the original entry, you can still enter with that calculator. It adjusts for all that.
I have a small account with too little capital to buy shares in all the stocks in the model portfolio. What should I do?
There’s a few options.
If your brokerage offers fractional shares, that is a way to get started with smaller amounts.
You could also pick and choose whichever stocks fit within your account. As we’ve said, you’re free to trade the All Stars however you’d like.
The best idea is to start by paper trading and learning, while building up your capital. The most important thing with a new strategy is learning and starting slow. Then once you’re confident and understand what’s going on, you can add more capital. There’s no rush. This is a long-term process to build wealth.
How come we didn’t rotate into all new stocks at the beginning of the month? One of our holdings dropped out of the top five, why are we still in the position?
On the last day of the month, the model evaluates the NASDAQ 100 to find which positions we will remain in and which we might rotate out and into. A new position will always be in the top 5 going into the first day of the month. However, we employ a “fudge-factor” that keeps us in a position even if it falls out of the top five, as long as it stays near the top 5 by a certain margin.
During the month, a stock might climb or fall in ranking, however, once we initiate a position in a stock, we will stay in it until either a stop or target is reached or the model tells us to rotate out of a position at the end of the month.
I missed the live coaching! Will there be a recording posted? When will it be posted?
Yes! A recording of the coaching will be posted on this page a few days after the live session. We’ll send you an email each month as soon as it’s posted.
How do I hook up my brokerage account to the All Stars?
There is no ability to connect your brokerage to our model. As we are an educational service, it is up to you to make your own trades in your own brokerage accounts.
Why aren’t there any trades in the Active portfolio?
One of our holdings is reporting earnings soon, should I get out of this position?
Normally we would not recommend holding a stock through earnings. They can be fairly random events that could cause a stock to gap up or down considerably. However, the NASDAQ 100 All Stars system does hold its positions through any earnings events that occur for positions it is holding. This can work for or against us on any given trade. However, the effect from any single earnings move will be mitigated by the fact that we have five holdings and in our research the overall historical effect on the equity of this strategy by holding through earnings was positive.
You can still choose to get out of a position prior to earnings (and re-enter afterwards), however, the model will continue to track performance based on holding the positions through earnings.
Should I enter existing positions or wait for new entries?
You are free to enter new positions at your own pace or timing, however, we have provided a calculator tool on the “Starting A Portfolio” page that will help you establish a portfolio, whether it is the first day of the month or the middle of the month. This page provides the necessary data and instructions for setting up a portfolio that tracks the model portfolio.
How much capital should I use to trade this strategy?
The question of how much capital a trader should allocate to any trade or strategy is going to have a different answer for every trader based on capital available and your own personal trading style and risk profile. Additionally, we’re not licensed to be able to give that type of specific advice. A good rule of thumb is to start slowly.
Regardless of how you start, you should always limit your capital to an amount that represents a level of risk that you can afford to lose. You can even paper trade the model for several weeks or a month to see how it trades. However, one period may not be representative of the return, risks, or volatility of the model over a longer period of time and in different market conditions.
There is a built-in level of diversification with the model typically holding five positions. However, with any momentum model, diversification by itself doesn’t prevent draw downs as momentum stocks can often have simultaneous and similar responses to market action.
For this reason, it might be helpful to initially consider a position size for the whole model that might relate to an amount you would put in a speculative or momentum stock like TSLA or NFLX.
How much of each position should I buy?
The model typically holds five instruments. New positions are always added at 20% of the total portfolio. Once a position has been started, its percent of the portfolio can grow or shrink based on its relative performance. On the “Starting A Portfolio”page we provide you with a calculator that shows the real-time allocation in each portfolio slot. You can use this to recreate the model portfolio in your own account. Recreating the portfolio in this manner will allow you to most closely track the model portfolios performance going forward.
What happens when my positions are no longer equal-dollar amounts?
New positions are entered with position sizing based on 20% of the total portfolio. Over time, this will cause some positions will grow or shrink based on its relative performance. The portfolio is rebalanced on a rotational basis – meaning that the profits or losses from positions are shuffled back into the model by setting / resetting each new position to 20% of the real-time portfolio value.
You may employ similar money management and rebalancing rules or come up with your own variation based on your trading style. The model performance and statistics will reflect the money management rules we have outlined here.
How do you buy at the open?
The model rotates in and out of positions by buying and selling the positions on the open on the first day of each month. If you would like to place orders before the market opens and get the “open” price you should an order called “Market on Open.” Each broker or trading platform may have a slightly different name for this type of order so check with your broker if you are not familiar with it.
This order is generally placed before the open and gives you the “open” price. The open price is determined by a process where the pre-market open orders are evaluated by specialists which determine the market clearing price at the open. You may also place market orders immediately after the market opens to enter these orders. Your entry should typically be very close to the one described in the model.
How should I read and interpret the information in the weekly model email updates?
Every weekend, we will send out an email that will summarize the model and market action for the week. We will also include a position summary for each of our five positions.
My questions haven’t been answered here and I need extra help. What should I do?
Each month we have live coaching where you can get all of your questions answered. There is nothing wrong with waiting a few weeks and joining that coaching to learn more. This is a long term system, so you won’t be missing out by waiting. Here is a link to register for the next training.