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Published July 7th, 2021

Monthly strategy for the ASX
Nick Radge trades the ASX Momentum strategy

ASX Momentum

A Long-Term Strategy that Trades Once a Month

Simple is best.

You can’t get much simpler than a strategy that trades just once a month.

A number of years ago I introduced Chartist members to a monthly US Momentum strategy. Then in December 2020, we added the ASX Momentum strategy to our portfolio mix.

So how does a monthly strategy work? Let’s step it out using the ASX Momentum as an example.

Firstly, it’s a systematic strategy meaning there is no human emotion involved. We tell you which stocks to buy, how many to buy and when to sell.

We only trade the top 100 blue-chip stocks on the ASX. The top 100 was chosen as many Super Funds (retirement funds) allow investors to trade in a limited market. The top 100 stocks being the safe-ground.

But…

What is Momentum?

Price persistence. Momentum is the ability of a stock price to continue moving in one direction. In our case, we want the stock price to continue rising.

A price in motion tends to stay in motion.

The strategy also measures the trend strength of the broader market.

When both the stock price and the broader market are displaying momentum then we buy the stock.

If the broader market displays a negative or downward trend then the strategy reverts to cash.

This is known as ‘dual momentum’ and is the cornerstone of all our trend and momentum systems.

What’s the Plan?

The plan is to divide our capital into 5 equal parts.

We then buy the 5 stocks displaying the strongest momentum.

On the last trading day of each month, we again scan the market for the strongest performers. The following trading day we buy or sell our new positions.

What’s the Performance?

**Please see performance Disclaimer below
The Chartist ASX momentum strategy long term performance

ASX Momentum FAQs

How much does the ASX Momentum cost?

The ASX Momentum is $660 incl. GST for a 12-month membership. The ASX Momentum is also included in the Chartist Pro package.

What payment methods do you accept?

Payment is via credit card however we can also provide an invoice if you would like to pay via bank deposit. To request an invoice, email Trish and include the name of the individual or entity for the invoice, address and phone number.

Is the membership tax-deductible?

Check with your accountant or tax advisor.

When do you buy?

Immediately. We want to be 100% invested straight away. This means buying those stocks annotated as “Buy” as well as “Holds” when the portfolio is started regardless of when in the month it’s started.

What broker do you use?

We use Self Wealth for this portfolio but you can use the discount or online broker of your choice.

Do you use leverage?

No.

Do you trade short?

No. Research and experience show that being in cash is more profitable and stress-free than attempting to trade bear markets.

Can you trade this strategy in your Retirement or SMSF account?

We don’t provide advice regarding your specific circumstances. Please review your SMSF’s Trust Deed and Investment strategy and talk to your accountant or financial planner.

 

 

** Performance Disclaimer

Important Information on Performance

PAST RESULTS ARE NOT INDICATIVE OF FUTURE PERFORMANCE.

Information containing hypothetical or simulated results has limitations and may not represent actual trading. Since the trades may not have actually been executed in the market, the results may under or over-compensate for the impact (if any) of certain market factors, such as lack of liquidity. Simulated trading programs are generally designed with the benefit of hindsight and without the need to predict which way the market may turn. No representation is made that any trading strategy will or is likely to achieve profits or losses similar to those shown.

Performance data shown assumes that securities are held for the specified time period, based on entry to exit price and entry and exit criteria. It does not allow for the initial entry fee or exit fee (when applicable) or the effect of dollar costs, inflation, taxation, broker fees, interest on margin, dividends, franking credits or membership fees. Different brokers, platforms and/or providers may offer different execution prices.

Returns are historical. Investment returns are volatile and future performance is not guaranteed. Performance figures are updated at irregular intervals and may not show the most recent data.

The material on this website is general in nature. It does not constitute personal investment advice or personal trading advice. Any advice or educational content provided is general in nature and does not take into account an individual’s objectives, risk profile or financial situation. Trading involves the risk of loss as well as the potential of profit. You should seek independent financial and taxation advice in deciding if trading is appropriate for you. Please also consider the appropriateness of the advice in light of your own objectives, financial situation or needs.

You specifically acknowledge and agree that your use of our online advisory services is at your own risk. While all material herein has been prepared based on information believed to be accurate at the time of publication, subsequent changes in circumstances and the market may occur at any time and may impact the accuracy of this information.

It is up to you to make the decision whether or not to act on a recommendation to trade. We provide information which may help you to make that decision.

The risk of loss in trading securities is limited to the amount invested. However, the risk of loss in trading derivatives or using leverage may not be limited. This means you may lose more than the amount required to hold and control the particular derivative or security.

The high degree of leverage that is often obtained in futures, options and contracts for difference can work against you as well as for you. The use of leverage can lead to large losses as well as gains.

This brief statement cannot disclose all the risks and other significant aspects of securities and derivatives markets.