Biotech stocks are notoriously volatile, creating a high risk/high reward sector, ideal for swing trading.
BioBounce.com provides two approaches to take advantage of the Biotech sector. Decide what works best for you!
The first approach is our BIB/BIS ETF trading system. BIB and BIS are leveraged ETFs that produce 2x the daily return of IBB. By Utilizing these two ETFs, we can profit from both the long and short sides of the sector, creating a significant performance advantage compared to a buy and hold strategy for IBB alone. See our performance above!
Because you only need to focus on BIB and BIS, this system is ideal for those that work full time or do not want to manage multiple individual positions. The BIB/BIS system shields you from exposure to major gap down catalyst events such as clinical trial data releases, FDA approval decisions, earnings reports, equity dilutions or anything else that you need to follow closely when trading individual biotech stocks.
Here is how it works:
- Take a starting dollar amount that you are comfortable allocating and dedicate it solely to trading only BIB and BIS
- When a buy signal occurs on BIB or BIS, we add either to our watchlist, with an entry price and initial hard stop.
- If the trade triggers, take your previously decided dollar amount and use it to buy the watchlist ticker (either BIB or BIS)
- Each night, we will update the hard stop price.
- Hold the position until the hard stop hits, or if you receive an email alert at the close of trading sell the next day at open.
- At this point, the system will have you in cash.
- When another buy signal occurs, we will add either BIB or BIS back to the watchlist.
- Take your total balance from the previous trade, and roll it all into the next once the entry price triggers. For example, if you put $10K into the first trade and it made 10%, you would roll the 11K balance into the next trade.
- Keep following this process over and over.
Check out our performance above! Here are some additional stats:
- The system makes on average about one trade per month
- with an average holding period of around 15-20 days.
- The average winning trade equals 11%
- The average losing trade is -5%
If you prefer to manage multiple individual stocks then our watchlist of stocks may be more suitable to your needs. When the Biotech sector is in an uptrend (when we are in a BIB position) we will automatically populate our watchlist with Biotech stocks with near term catalysts. Once the Biotech sector trend goes bearish (when we are in a BIS position) no new tickers will be added and the current positions we are in will be continually updated until they get stopped out.
Here is how it works:
- When BIB triggers within the BIB/BIS system, we will then start populating our individual Biotech Watchlist with stocks that have a high technical probability of entering an uptrend.
- When up to 10 trades trigger and move to the holdings list, we will not add any further tickers. If one stops out, then we add one more to the watchlist to get the list back to 10.
- Because it is impossible to predict which trades will be profitable, it is recommended you use the same dollar amount for each trade to balance risk. For example, if you put $5k into ticker ABCD and it goes up 10% but put $15K into ticker WXYZ and it loses 8%, you’d be down $700. Conversely, if you put $10k into each ticker, you’d be up $200.
- Buy the stock at it’s indicated entry price and immediately set the indicated hard stop price.
- Check in each night or morning and update your hard stop if necessary. If you get an alert after market close to sell the next morning, simply do so.
- Use the same process for each trade you enter
- If you are a member, you can email me (BioBounce@BioBounce.com) any of your stock picks. If it sets up according to our methodology, we may add it to the watchlist!
Regardless of your trading experience and/or time sensitivities, we have a solution for you! We provide the trades; you provide the execution!
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