Investors FastTrack

Quality Data for Investing Strategies

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What’s in the FastTrack Stocks Database?

We’ve posted in the past about the decreasing number of investible stocks in the US (https://investorsfasttrack.com/is-passive-active/). Per the post, there’s about 3,000 investible companies listed in the US. But, FastTrack has approximately 4,500 stocks in the database. What makes up the difference?

First, FastTrack tries to include every stock listed on the NYSE and NASDAQ exchanges (including NYSE Arca and NYSE American). Those exchanges both have their own price, market cap, and volume requirements for listing/maintaining a listing. We update new listings/ discontinued issues as they IPO and/or approximately every month.

Adding all NASDAQ and NYSE tickers brings us to approximately 4000 tickers. Next, we take any liquid, large and mega cap over the counter ticker and add those in. Those names are typically international companies such as Tencent Holding, Royal Dutch Shell, Nestle SA, HSBC Holdings, Toyota Motor, etc. Typically there are 300-400 such tickers, rounding the database out to ~4,500.

There are thousands more OTC tickers out there, but the data quality and investability of those assets are low, so we can’t include them in the database.

Now, with all those tickers at hand, it’s very useful to sort and sift those securities with the the FT Cloud or FastTrack family sieve. In the screenshots below we’ll use the FT Cloud family sieve to analyze all liquid large securities.

  1. Sign in to FT Cloud, click the “Spreadsheet/Chart” tab, then click the “Load Family” in the upper right corner.
  2. Expand the Stocks >> Avg Volume Trees on the left of the new window
  3. Select each of “Volume-Over 5 Mil” then click “Add” in the upper right
  4. Select each of “Volume-1-5 Mil” then click “Add”
  5. Select each of “Volume-500k-1Mil” then click “Add”
  6. Click “Load” at the bottom right

Now, you should see the ~1,800 liquid securities on the spreadsheet

Dual Momentum and FT Cloud+

In 2011, FT Cloud started as solely a momentum trading engine, but gradually expanded to incorporate more general tools such as the spreadsheet, chart, and family tree. Today’s posts brings us back to the original concept, with a slight twist.

Gary Antonacci wrote the book Dual Momentum Investing (http://a.co/bgR4Jx8) and it covers the ins and out of the history, thought process, etc of the strategy. It’s a 10 chapter pretty easy ready. Today’s post is about how to execute the idea with ease using FT Cloud+.

 

Some basics

There are generally two types of momentum investing- Relative and Absolute.

Relative Momentum has been popular with FastTrackers for years. Relative momentum compares the trend of asset A with the trend of asset B in order to to choose which asset to invest in. Traditionally you invest in the asset with the strongest trend. (ie, invest in small caps vs large caps when one trends higher). In FT4web and FT Cloud, this is done with the R chart (https://investorsfasttrack.com/help/spreadsheet/ftchart/available-charts/) or with the off the shelf FT Cloud+ momentum model (https://investorsfasttrack.com/basic-skills-videos/)

Absolute Momentum compares an assets performance to a fixed target, not a relative target. In the book, Antonacci compares excess returns of an asset over cash during a 12 month period to calculate a positive or negative momentum.

Antonacci combines both in his book (ie “dual” momentum). In FT Cloud+, the concept is called a “hurdle rate.” The full docs are here: https://investorsfasttrack.com/help/other/hurdle-rate/

 

Execute in FT Cloud+

Below is a screenshot of the FT Cloud “dual momentum” model in red and SPY in grey. The model inputs are a two fund Family, DUAL (VEA – Vanguard FTSE Developed Markets ETF and VTI – Vanguard Total Stock Market ETF) and a hurdle rate of TLT – iShares 20+ Year Treasury Bond ETF.

Explained in plain English, the models works in two steps:

  • Step 1, every year rank the family over the trailing 12 months, pick the fund with highest total return.
  • Step 2, rank the fund vs TLT (the hurdle) and invest 100% of proceeds in the one that has the greatest total return.

The setup is about 4 button clicks in FT Cloud and outlined. Its is a pretty simple model, but you can expand on this buy adding add multiple more screens/filters/rankings/etc to the model’s hurdle.

On top of that, there’s logs for all the calculations, so you can audit everything pretty easily.

 

Step by Step


  1. Build your “dual” family by typing your two tickers into the spreadsheet.
  2. Save the family by clicking the save family button

  3. Set up the momentum model parameters. For this dual momentum option, % to sell MUST be 100% and the # to buy MUST be 1. All other parameters can be customized.
  4. Check the “hurdle rate” check box on the right. Click “hurdle rate” to open the parameter window. Add “TLT” as the hurdle, select “replace” checkbox and then click “apply.”
    Hurdle rate parameters window

     

  5. Press run on the FT Cloud+ screen.

The screen on the bottom half will show a chart. That chart has a grey line, the benchmark, and a red line (uncheck the colored checkboxes in the upper left to add/remove models from the chart).

 

 

Change Chart Color Bar Colors

If your printing charts, doing a presentation, or just want to mix things up, changing the color of the chart tickers is easy.

Change color bar color

  1. Right click the name of the ticker/ ticker input you wan to change. Select “change color”
  2. Next, select the color from the pallet and the window will auto close. This is saved to the cloud, so next time you open FT Cloud, your custom color settings will remain.

Reset to default?

  1. Right click anywhere on the chart, select “parameters.”
  2. The new “parameter panel” will appear. Click the “reset color bar colors” button on the lower right.