Alex Roslin, 41
Consists of a number of active trades, using exchange-traded funds such as Horizons BetaPro S&P/TSX Capped Financials Bear Plus ETF and SPDR Gold Trust ETF.
Alex Roslin is a Montreal-area journalist who writes on a variety of topics and has won two awards for investigative journalism from the Canadian Association of Journalists. He is also president of the Canadian Centre for Investigative Reporting. His investing and business writing can be found in the Montreal Gazette and The MoneyLetter.
He started investing in mutual funds in the late 1990s. The dot-com crash left him with the view that buy-and-hold was not the way to invest.
He became familiar with technical analysis and developed his own trading system based on the Commitments of Traders (COT) report published weekly by the Commodity Futures Trading Commission. To diversify, he uses a second approach: "Tom DeMark's sequential system" for chart reading.
Trading system no. 1: Commitments of Traders data
The COT report tracks futures and option positions in dozens of financial and commodity markets, from the S&P 500 index to crude oil, silver, Treasuries and the U.S. dollar. Mr. Roslin's system applies technical analysis to data from all three groups of futures traders found in the COT reports: commercial traders, large speculators and small traders.
Some analysts follow the commercial category - the so-called "smart money." But Mr. Roslin's research has found that it is often better to trade opposite to extreme positions held by the large speculators or small traders. Since 2007, he has published the system's trading signals and his trades on the blog, cotstimer.blogspot.com.
Trading system no. 2: Tom DeMark's method
"I buy breakouts to important new highs on daily or weekly charts that I identify using Tom DeMark's system - what he calls Tom DeMark Setup Trend lines," Mr. Roslin reports. "I sell positions when they break down through these TDST lines."
He went long on the U.S. financial sector in July, 2009, through a position in the ProShares Ultra Financials ETF, and scored a 56-per-cent gain over four weeks.
He went short on natural gas in November, 2009, with a position in the Horizons BetaPro Nymex Natural Gas Bear Plus ETF, and took a 35-per-cent loss over four weeks.
"Always use stops and other risk-control rules like appropriate position size [amount of capital exposed should be small relative to one's portfolio]and diversification to preserve your capital. Follow your system with discipline."
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