Low trade frequency is good, but it won't last

Mar 13, 2024


VTS Community,

As we've talked a lot about this year, low trade frequency is usually a good thing.  It likely means we've identified a longer term trend and we are just riding it with aggressive market positions.  The times when trade frequency ramps up is when the signals are more ambiguous and we have to move towards safety positions to protect capital.  That's essentially how Tactical investing with Volatility targeting works:

Participate in as much of the good periods as possible, and avoid as many of the bad periods as possible, rinse repeat.


So the current trend we're on the last several months with very low trade frequency is a good thing.  All three of our strategies are making outsized gains compared to their long term averages, we're having a good time.

However, it's not the norm and we can't expect it to last forever.

The time will come, perhaps soon, that we have to get our "tactical rotation" hats on again and start putting the strategies through the paces of utilizing the entire suite of risk management.


I thought everyone would appreciate just getting a 30,000 foot visual representation of trade frequency in each of our 3 tactical rotation strategies.  You can see an overlay of the trades on top of the S&P 500.


Defensive Rotation Strategy

- Average # of trades per month:  3.84


Tactical Volatility Strategy

- Average # of trades per month:  2.07


Strategic Tail Risk Strategy

- Average # of trades per month:  2.04


VTS Total Portfolio Solution trade frequency:



Trade frequency is definitely in a very low range lately, but as you can see it's much more normal to get on average about 11 trades per month across our suite of strategies.

-  Low enough that we can capitalize on stable market periods

-  High enough that we can rotate to safety when necessary


Some investors want more action and are probably chomping at the bit for more active trading.  I for one am very much enjoying riding this latest trend and just racking up the profit.  Trust me, a time will come when the market starts going the other way, and we might start longing for the days of low trade frequency again.

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