Stocks & Commodities V. 33:12 (34–37): Trading Multiple Stocks by Norman J. Brown

Trading Multiple Stocks by Norman J. Brown

Here’s a switching technique that further enhances the annual return associated with “one rank” performance.

In my previous article, “Combining Persistence With Strength,” published in the August 2015 issue of Technical Analysis of STOCKS & COMMODITIES, I showed that you can achieve an enhanced annual return (Ann) for stocks if you trade stocks, one at a time, that exhibit persistence (that is, short-term memory), a technique I termed “OR.” I have had a number of articles published in S&C that discuss the advantages of that approach. In my August 2015 article, the OR Ann is considerably improved if you trade two stocks using the trading technique OR, including a relative strength (RS) term (designating the composite as “ORRS”) by using an if/and command that is easily implemented in Excel. In this article, I expanded the ORRS concept from two stocks to 10 persistent-type stocks and found a dramatic improvement in Ann by adding those stocks into the ORRS process, one at a time, to assess the optimum number of funds...