ETF and Stock Picking Performance – Q3, 2012 – On Track For A Winning Finish

So far, the third quarter of 2012, and especially the month of September has been solidly profitable for us. From the start of the month, through the close of trading on September 19, (the most recent performance update here on our website), the ETF trading of our model trading portfolio have gained $2,491 this month (75% win rate on 4 trades, with the avg. winning trade being 3.3 times greater than the avg. losing trade). On the individual stock model portfolio, we are showing a gain of $2,051 (56% win rate on 9 trades, with the avg. winning trade at 1.89 times the size of the avg. losing trade). Altogether, this represents a month-to-date gain of 5.0% in our model ETF portfolio and a gain of 4.1% in our model stock portfolio (click here to see detailed, cumulative history of trading profits of ALL our trades since 2002).

An important reminder for experienced followers of our trading strategy, and a key point for newer traders, is to notice that a high win rate (% of winning trades vs. losing trades) is NOT necessary to be a consistently profitable trader. What matters more in the long run is whether or not the dollar amount of your average winning trade is substantially greater than your average losing trade. That’s why we only focus on buying stocks and ETFs with a potential reward to risk ratio of at least 2 to 1. Doing so enables us to still have profitable months, even when our batting average sometimes falls as low as 40 to 50%. However, in order for the math to work, it is quite important for traders following our picks to participate in ALL the trades, rather than picking and choosing. That’s why we have this replicable model portfolio that makes it easy for our members to do so.

The graph below compares the hypothetical growth of a simulated $50,000 account since inception of The Wagner Daily newsletter in 2002. It is calculated based on quarterly compounding, using the exact historical swing trade performance data detailed below the graph (please note disclaimer at bottom of page):

Note on the graph above that we stayed out of trouble during the big stock market collapse from 2007 to 2009. Our objective market timing model, which is designed to keep us out of harm’s way during violent bear markets, and even profit through inverse ETFs and/or short selling, is one of the key reasons traders maintain their subscription to our swing trading service over the long-term.

The reality is that profiting from ETF and stock trading in a raging bull market is not that difficult because a vast majority of stocks will trend higher, but what separates amateurs from the professionals is the ability to hold on to those profits when the stock market inevitably changes direction, which usually occurs quite swiftly. Overall, the combination of our winning trading system and market timing model is designed to help subscribers generate consistent trading profits in flat to uptrending (bull) markets, while preserving capital in downtrending (bear) markets. Even if you excluded the detailed ETF and stock picks provided in our nightly newsletter, many members feel their Wagner Daily subscription pays for itself many times over, just for access to our proprietary market timing system alone.

DISCLAIMER: These hypothetical results do not represent actual trading. Although the performance results and share sizes displayed on this page are from the actual entry and exit prices listed in our trading newsletter, all performance data on this page, and throughout our web site, is hypothetical and for educational purposes only. In reporting the performance data above, realistic execution prices for entry and exit are used, but trades may or may not have actually been executed in a real account. Therefore, even if following our system completely, an individual’s actual results may vary due to market factors including lack of liquidity, slippage, and commissions. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those reported. On the graph above, dividends from the S&P 500 Index are not factored into the results. At any given time, Morpheus Trading Group may or may not have actual positions in the ETF and stock trade ideas presented to subscribers. The goal of our service is for a trader to learn how to properly follow a disciplined trading system and to manage risk in their own accounts.