TL/DR: SLIM on TSLA runs its analysis every trading day with the open price. If the system throws a buy or sell signal, subscribers are immediately informed via email and/or SMS. In conjunction with other sources of information, they can then take action. NB: Be aware of broker fees and slippage!
How It Works
On every trading day at the opening of the NASDAQ stock exchange, SLIM on TSLA gets the open price of the Tesla stock (TSLA).
The SLIM analysis framework runs its trend recognition analysis.
If SLIM detects a buy or sell moment, subscribers will immediately be informed of the signal via their preferred means of communication (email and/or text message; SMS not available in all countries).
Notice regarding how quickly to act upon a signal from SLIM on TSLA: The System was backtested with buying and selling at the open price on days with signals. The tests showed a substantial reduction in performance if slippage of 1% was assumed with every transaction. In reality, slippage doesn’t always occur in the adverse direction, so there might be a compensation effect to some extent in the longer term. However, to allow for the best outcome with using SLIM on TSLA, I recommend to act as close to the open price as possible.
Notice regarding transaction/broker fees: The performance of SLIM on TSLA on this website and in the fact sheets were calculated without any transaction fees because these fees are very different depending on the broker. When backtesting with a transaction fee of 0.1%, there’s hardly an impact on the performance of SLIM on TSLA. With a transaction fee of 1%, however, the total performance since 2011 gets a huge hit and the CAGR is reduced by approx. 1/3. Therefore, it is advisable to check the fees of your broker before you start to optimize your TSLA investment with SLIM.
How to Use the Signals
Subscribers can then use the SLIM signal for their individual implementation and strategy. It fully is the subscribers’ responsibility what decisions and actions the take or do not take based on the SLIM signals.
Examples of strategies that use the SLIM signals:
- Long-Only (Long/Cash, respectively) strategy with TSLA shares: Upon a sell signal, reduce your TSLA exposure by selling 50% or even 100% of your TSLA position, wait with the powder ready, and reinvest on the next buy signal.
- Long/Short strategy with TSLA shares: If your trust in the accuracy of the SLIM signals is high, you can even make profits in the bear periods instead of just waiting. Upon a sell signal, short TSLA by selling more than your current TSLA position (e.g. 150% or even 200%) and reinvest on the next buy signal.
- Long/Short strategy with ETF: Invest in a TSLA Long ETF on buy signals, and switch to a TSLA Short ETF on sell signals.
- Long/Short strategy with options: Buy calls on buy signal, and sell these calls and buy puts on sell signals. WARNING:
- Options are derivative instruments with high risks and a loss potential of 100%. Only trade with options if you are familiar with the characteristics and risks of options.
- I haven’t tested an implementation of SLIM on TSLA with options. As options have a decreasing time value, I don’t know if this strategy would really work with the SLIM on TSLA signals.
Words of Warning
SLIM systems are NOT trading systems for short-term profits, but trend recognition systems that were developped with the aim to improve the performance of a long-term investment by trying to detect and circumvent bear periods. The systems are tuned to find an optimal balance between too few signals, which would increase losses by waiting too long after a trend reversal, and too many signals, which would kill performance with trading fees and slippage. Depending on the volatility of the year, SLIM on TSLA has historically generated 6 – 25 signals per year.
The signals of SLIM Systems are explicitely meant as one of many sources of information for sophisticated, knowledgeable stock owners who are familiar with the risks of buying & (short) selling stock and the practice of researching & considering various sources of information for investment decisions, and are aware of the difficulties in attempting to predict future price movements based on analysis of past indicators as well as of the risks associated with the use of such signals to invest/disinvest or hedge a position.
SLIM on TSLA has been very accurate so far in detecting buy and sell moments, allowing for a substantial improvement of an investment in TSLA. However, past performances of my systems do not guarantee future accuracy and success, and SLIM Systems does of course not give any warranty for similar accuracy of delivering signals in the future. SUBSCRIBERS ARE FULLY RESPONSIBLE FOR ANY DECISIONS & ACTIONS THEY DO OR DO NOT TAKE BASED ON THE SIGNALS THEY RECEIVE FROM SLIM SYSTEMS.
SLIM Systems' fully computer-based trend recognition systems generate signals which are automatically sent to subscribers as information. The signals do NOT represent financial advice, and SLIM Systems does not offer personal financial advice or personal advice on the use of the SLIM signals or on investments, divestments, and hedging with the signals.