Our Smart(R) methodology is a much more sophisticated (though easy-to-use) approach, as it:
- pre-determines an intelligent trailing price point by tracking the macro trends of the stock market as well as examining the individual factors that have most significance in the equity’s risk profile.
- it adjusts both up and down making it help you stay in the trend longer!
- Different sets of strategies are applied during our optimization process that may potentially tighten or widen the stop loss price point. This methodology is based on proven criteria used by even the big institutions in the industry.
A view of how SmartStops works
The beauty of the Smart(R) approach is that it continually adjusts to give room for the stock or etf price to run. In other words, if using SmartStops as a continual smart trailing stop order for your positions, you won’t be stopped out too soon. And if just following our Risk Alerts, you will only receive a risk alert when there is strong probability of future decline.
Why do you have both an Aggressive and a Conservative SmartStop?
Smartstops recognizes there are different kinds of participants in the stock market. Some are more active traders while others are longer-term investors. To serve both effectively we designed our systematic risk approach to provide for a more “Aggressive” SmartStop which provides the maximum downside protection and typically lies closer to the equities price. Whereas the “Conservative” SmartStop allows more more price fluctuation resulting in few trades and less potential whipsaw. MOST IMPORTANT – Both signal families intelligently adjust in an effort to keep you in an uptrend longer while exiting early in a prolonged downtrend. As the infamous Howard Marks (Co-Founder Oaktree Capital Management) states:
“The road to long-term investment success runs through risk control more than aggressiveness. Skillful risk control is the mark of the superior investor.”
The most important thing to successful investing is controlling risk which is unavoidable if you want to participate in the stock markets. Remember that the amount and size of your investment losses will have more to do with your returns than the magnitude of the winners.