Zacks Rank #1 is based on expected positive price action after positive estimate revisions. Look at the attached “und” file how I select the best 12 out of that pack, making sure I don’t get penny stocks or micro caps, and I have enough trading liquidity for my money management. Hedging is the art of pairing risks of the same kind. So I pair my best ZR1 bets with the worst shorted ZR5 bets (look for second “und” file attached). RW doesn’t allow you to combo a long trade with a short one, so you have to export both strategies to Excel and add the gains/losses of the corresponding periods of both strategies. Over 12.5 years, your maximum drawdown is 11%, annual compounded growth rate is 30%/year, average weekly gains are just over half a percent, and YTD you got 17%. The first chart shows the performance of the added gains/losses, the second one takes the average of the two and makes the hedging equally weighted (Hedging ratio=1).
Kevin, how difficult is it to make hedging available through combo’s in RW?