Learn The Strategies
Discover how both strategies work and what investment vehicles they trade. Understand the purposes they serve alongside each other when used together in a diversified portfolio.
While margin accounts are easiest to use SmartLev can be used in cash or IRA-style accounts since it uses long ETFs only. Tactile Options does require a margin account and has a higher recommended minimum to accomodate certain option-selling strategies.
Decide if our strategies suit your long term investing needs and personal risk tolerance.
|Objective||Long Term Growth||Diversification|
|Investment Vehicle||Exchange-Traded Funds (ETFs)||Multi-Leg & Short Options|
|Account Type*||Tax-Sheltered Eligible||Margin Required|
*Always check with your broker which investments are permitted in your tax-sheltered account(s). Please consult a tax professional for information on capital gains and how they may affect your situation. I am not a tax expert.
**An approximation for when individual strategies become efficient due to trade commissions & monthly subscription fee.
Before You Join
You'll need the right attitude - successful investing requires discipline and patience. While we aren't buy and hold investors, many of the same principles apply. Let the compounding do its job.
You'll need access to US markets. Both strategies trade US-based securities only because they are the most liquid and accessible.
You must be comfortable executing trades in your trading account. Our strategies use ETFs, long and short options.
You should monitor your account daily. That said, this is NOT day trading. Both strategies trade only several times per month on average.
Practice Makes Perfect
Every new subscriber is welcomed with a 30 day free trial. You'll have time to test drive the strategies in your paper trading account.
Take your time, get comfortable with the strategies and see if our style of trading suits your lifestyle and personal risk tolerance.
Get Familiar With The Daily Signals
Every trading day before 12:00PM Eastern Standard Time (EST), subscribers receive an email containing the daily signals for each strategy.
Signals are clearly marked to indicate which position(s) the strategies are holding on that day. On days when an action is required, clear instructions are given.
Execute trade(s) in the morning before work, during coffee break, or any time during market hours.
Signals are actionable on the day they are given only.
Why Our Trading Is 'Tactile'
When you trade with our community, it's 100% hands-on. That means each trade is ultimately your decision.
I've made my educational content and personal trading decisions available to the public 'as is' because I'm passionate about trading, alternative portfolio management and sharing my work with others who are interested.
That said, I do not offer personalized investment advice and I am not certified to do so. By subscribing, you acknowledge the disclaimer at the bottom of this page.
Frequently Asked Questions
This section will be continuously updated whenever a community member asks a question that others might be interested in as well. Be sure to check out the blog for more information and insights.
Day trading is usually defined as any trade opened and closed during the same trading period.
I don’t like day trading because:
#1: It’s risky – since you’re looking to capitalize on smaller intraday % moves, you’ll be risking more capital to translate those gains into dollar amounts.
#2: It’s risky – many day traders rely too much on technical analysis. It’s harder to have an ‘edge’ when your time horizon is ultra-short.
#3: It’s stressful and time consuming! Who wants to be glued to their computer all day watching charts when you could just execute once in the morning, if needed, and get on with your day?
#4: It’s the wrong way to go about building wealth. Constantly realizing gains or losses can cap your earning ability. To allow the compounding to work, you do need to hold positions overnight. Additionally, many people still view it as a way to get rich quick. It’s just not realistic.
#5: It can be restrictive. Pattern day trader rules require you to have at least $25,000 in your account. This is a lot for investors who are just starting out.
All of our strategies at Tactile Trade operate in daily timeframes. I run the numbers every morning, and take action if needed. Otherwise, we all just go about our day. Both strategies have an average trade frequency of about 2-4 times per month. We only change positions if the current market conditions warrant it.
I will never try and convince you to quit your day job and become a full time trader. It’s unrealistic for 99.9% of us. Get an income, cover your expenses, pay off any debts, and then invest.
The Market Sentiment Index is made of about 15 volatility and stock market momentum indicators which are normalized and then combined together. The index essentially represents an average reading of many of the indicators I use in my trading and how they compare against their historical values.
This ‘ranking engine’ is a useful way to quickly gauge the current level of risk for equities, relative to history going back to 2007.
Designing rules-based or algorithmic strategies around this type of system helps reduce the risk of curve-fitting in two ways:
#1: It doesn’t rely on any single indicator too much therefore reducing the chance of dumb luck and increasing overall signal quality.
#2: Comparing readings to historical benchmarks is often more meaningful than picking arbitrary values.
I share the Market Sentiment Index reading and percentile rank every morning along with the strategy signals so community members can get a better feel for the markets beyond simply following the strategies.
Risk management is a little different for each strategy. Portfolio-wide, our 50/50 allocation was chosen based on the ‘efficient frontier’, a concept in portfolio management that aims to weight each investment to maximize returns while minimizing risk as measured by volatility. Remember, I can only share what I personally do as I’m not a licensed investment advisor. You may use the strategies or allocate however you like.
SmartLev only allocates to leveraged equities (or vanilla equities, depending on your chosen ETF) when most advantageous to do so, as measured by volatility, momentum, and several proprietary indicators. This results in long term returns that exceed our benchmark, despite only being allocated during approximately 60% of trading days.
Tactile Options relies on position sizing and stop-losses. Trades are scaled to a maximum of 40% allocations (usually less) and we often use 50% as our stop gain or loss. Trades are also either defined-risk or cash-secured – no naked short options. We also use index ETFs as much as possible to reduce idiosyncratic (individual) risk.
Overall, risk management in the portfolio comes from position sizing, stop-losses (where applicable), and the rules built into the strategies themselves.
The benchmark shown in each chart is a 70% / 30% allocation mix of the Vanguard Total Stock Market ETF ($VTI) and the Vanguard Total Bond Market ETF ($BND). For simplicity, this combination shown is rebalanced (bought or sold necessary shares to maintain the 70/30 mix) on a daily basis. In reality, someone investing in these two ETFs might rebalance quarterly or semi-annually.
Why this benchmark?
The Tactile Trade Portfolio is intended to be a replacement for traditional index investing. When it comes to broad-market index funds, these two are just about as broad and low-fee as possible. Because of this, I believe this 70/30 mix does a good job of representing the returns of an average index ETF portfolio. It’s essentially trying to represent the returns you could expect from a robo-advisor such as Wealthfront, E*TRADE Core Portfolios, Wealthsimple, or perhaps even mutual funds.
Anywhere a chart is shown on either the home page or any strategy page, you will by default see live trading performance, unless there is the ability to toggle between live and live + backtest.
Live trading represents the real-life execution prices I received on my orders, at the time of trade execution. All statistics include $5 commissions for ETFs, $1 per contract for options. I will never retroactively change live trading data if the methodologies of any strategies change, or of the overall portfolio if new strategies are added.
My commitment to you is transparency.
Short answer – no! Tactile Options has a higher recommended minimum to accommodate option selling strategies and allow wiggle room for proper allocation sizing.
Why $5,000? Imagine we have two trades open at one time:
- An iron condor with a maximum risk of $400 per spread and $5 width between strike prices
- A diagonal spread with a maximum risk of $600 per spread, opened for a debit
The iron condor will have a margin requirement of $500 ($5 width x 100 option multiplier). You can’t open the trade if you don’t satisfy your broker’s margin requirements.
If both trades have a target allocation of 30% each, then achieving proper position sizing is easy with $5,000:
$5000 x 30% = $1,500
Iron condor: $1,500/ $400 max risk = 3 spreads
Diagonal spread: $1,500/$600 max risk = 2 spreads
Anyone scaling both trades correctly (30% + 30%) will only risk 60% of their capital. Someone trading with a smaller account size might end up being over-allocated, closer to 100%. A loss would be more costly to the smaller account. You can start to see why we focus on proper position sizing and $5,000 is a reasonable minimum!