Copy This Share Trading Strategy, and You Could Make a Lot of Money

Hands holding money - Australian dollar (AUD) banknotes - money raising, funding & consumerism concept

They call it the greatest show on Earth.

And who could disagree?

More than 10,000 athletes, from 207 nations, competing in 31 sports. They broke records, made history, and became legends. It was a truly remarkable 16 days of sport.

The Olympics are always a favourite of mine. But these ones were extra special. You see, I had a close connection. My running coach — Ben St Lawrence — was in the men’s 10,000 metres.

Ben is a superb athlete. He’s a two-time Olympian and National 10,000-metre record holder. Not only is Ben one of the fastest men on the planet, he’s also a terrific coach.

I’m going to share a story with you. It’s about a brief moment while training with Ben. This made me think about the process of excelling, and how anyone can be their best.

Let me set the scene…

Ben is a hands-on coach. He doesn’t just tell his squad what to do…he shows us as well. This means we literally get to train alongside an Olympian.

A typical training session begins with Ben giving instructions. On this particular day, he tells us to run seven kilometres at a medium-hard pace. Not quite race effort…but fast.

Now, the members of the squad have a range of abilities. So we don’t all run together. Ben staggers the start. The aim is for everyone to finish around the same time.

Things get interesting about halfway into the run. This is when the group begins to bunch. I’m closing in on the early starters…and the fastest runners are on my heels.

This is when it happens. It’s literally a flash. An Olympian passes me.

It was as if I was standing still. And that’s no exaggeration. I was running at close to 15 km/h. But Ben was cruising at over 20 km/h. We were worlds apart.

Many would say I’m out of my depth. They would say it’s better to train with people of similar ability. But I disagree.

You see, it’s the talent within the squad that makes it so worthwhile. Many are faster than me — especially the coach. And that’s good. Exposure to faster runners makes me better.

Here’s the thing: I do exactly what they do. I make their training routine my own. I use their mental tricks to push harder, for longer.

I’ve no doubt that running with high calibre people lifts my game. I reach a level not possible on my own — or with lesser company.

Being around the right people is one of the best ways to improve. They provide a ready-made model of success. It’s a case of following their tried and tested strategies.

Formula for success

Now, this story isn’t unique to running. You can apply the process to just about anything.

Take trading for instance.

I’ve had some terrific mentors over the years. Learning from them made a huge difference. This not only put my career on a fast track, it also put it on the right track.

Quant Trader can do something similar for you.

Let me explain what I mean.

Quant Trader has its own formula for success. It’s a process that comes from my own trading experience. There’s also an indirect influence from the great traders I had exposure to.

Have a look at this graph…

[Click to enlarge]

I’m sure you’ve seen this before. It’s Quant Trader’s hypothetical profit going back to 1993. It assumes placing $1,000 on every signal, and there’s no allowance for costs or dividends.

Now, there’s quite a bit you can learn from this.

Quant Trader has a strong stock bias. The system buys into strength, and exits stocks that falter. This is one of the key reasons it’s been successful for so long.

It sounds all so simple — buy when prices rise, and sell when they fall. That’s one of the underlying principles of good share trading. But many people do the opposite.

Just think about your own trading. Have you ever bought a weak stock in the hope of a recovery?

Don’t worry if the answer is ‘yes’. This is a trap many traders fall into. While it can seem a good idea, weak stocks often remain weak. It’s generally best to avoid these situations altogether.

Another lesson is to let your winners run. This is the single most important factor in maximising profits. Doing this is at the core of Quant Trader’s success.

Sure, a quick 10% or 20% profit is appealing. But cashing in modest gains can hold you back. It means you can’t get the 100%-plus moves. These are the trades Quant Trader targets.

You can do it too

Quant Trader has only been around since 17 November 2014. This means results in the previous chart are hypothetical — most of the signals didn’t occur in real-time.

But go back and have another look at the chart above. You’ll notice a red circle in the top corner. This is the period of live signals. It’s where back-testing ends and reality begins.

Let’s zoom in on that area in the circle. To make it interesting, I’m going to include an overlay of the All Ordinaries for the same period.

Have a look at this…

[Click to enlarge]

You can see the difference this strategy can make. Quant Trader (blue line) is comfortably ahead of the All Ordinaries (red line). This largely comes down to what I told you about earlier:

  • Buying into strength;
  • Running profits; and
  • Cutting losses.

Now let me briefly tell you how I calculate this comparison data. It’s a bit technical. But I want you to understand what you’re looking at.

The first step is to calculate the daily return. I do this by subtracting the current day’s total equity from the previous total. I then divide this by the total investment as of the previous day.

Step two is to calculate a cumulative return. This is done by multiplying all the daily returns together. The end figure is the total hypothetical return to date.

I do the same for the All Ordinaries. This then allows me to compare the two.

Remember what I said earlier:

…exposure to faster runners makes me better. I do exactly what they do. I make their training routine my own. I use their mental tricks to push harder for longer.

The same applies to trading. You can learn to trade better by doing what Quant Trader does…you can make the strategy your own.

And it’s an easy approach to understand.

Quant Trader is all about buying what’s going up, and avoiding — or shorting — what’s going down. You then cut your losses, let profits run, and use a trailing stop.

The mental side of trading is just as important. This is something I’ll talk about in the weeks ahead. My aim is to help you become a better all-round trader.

So don’t just marvel at top performers…copy them. Make their ways your own. You may find it helps you reach your goals in record time!

Until next week,

Jason McIntosh,
Editor, Quant Trader

Editor’s note: Are you falling short of your goals? Do you find it a struggle to consistently make good profits? Don’t worry, you’re not alone. The stock market can be a tough place to navigate on your own.

Here’s something you should do — check out Jason McIntosh’s Quant Trader advisory service. It’s a fully algorithmic trading system for ASX stocks. Quant Trader scans practically every company. It then tells you when to buy and sell. I can just about guarantee you’ve never heard of some of the stocks it identifies.

Try it. See if it makes sense to you. It could change the way you trade forever.

All charts are sourced by Quant Trader unless otherwise stated.

Jason McIntosh

Jason McIntosh

Jason is a professional quantitative analyst. Before he graduated in 1991 he joined Bankers Trust — a Wall Street investment bank — to be a trader. After Bankers Trust was taken over in 1999, Jason, already financially independent, co-founded a stock market advisory and funds management business called Fat Prophets. At 37 he sold his part of that business and retired. These days, he’s a private trader and system developer. In 2014 he launched the wildly successful trading service: Quant Trader.

Leave a Reply

Be the First to Comment!

Notify of

Letters will be edited for clarity, punctuation, spelling and length. Abusive or off-topic comments will not be posted. We will not post all comments.
If you would prefer to email the editor, you can do so by sending an email to