LBR The Motley Fool Foolish Four Portfolio Rotation Strategy by uzair2join
By uzair2join
Performance Metrics
- Author: uzair2join
- Symbol: ICMARKETS:XAUUSD
- Timeframe: 5 minutes
- Net P&L: +8,612.46 USD (+8.53%)
- Win Rate: 100.0%
- Profit Factor: 623.323
- Max Drawdown: 2,084.25 USD (1.94%)
- Total Trades: 6
Description
Linda Bradford Raschkey's Foolish Four Portfolio Rotation StrategyThis strategy implements a rules-based portfolio rebalancing framework inspired by systematic dividend-style equity rotation concepts. It is designed to simulate structured portfolio reallocation on a fixed schedule rather than short-term trading.🔍 What This Strategy DoesThe strategy:• Rebalances either monthly or yearly• Allocates capital across four positions• Uses fixed percentage allocation• Applies realistic trading conditions (commission + slippage)• Limits per-position risk to sustainable levels (default 5%)This is a capital allocation strategy — not a signal-based indicator.🧠 Core ConceptInstead of attempting to predict price direction, this model:Uses time-based portfolio rotation.Closes all open positions at rebalance.Reallocates capital according to chosen weighting logic.Maintains disciplined exposure caps.Two allocation modes are included:1️⃣ Equal-Weight VariantAllocates capital evenly (25% per asset).2️⃣ Weighted VariantAllocates heavier exposure to one asset (40%) and lighter to others (20%), capped by the defined risk % to remain compliant with sustainable equity exposure.⚙️ Default Strategy PropertiesTo comply with TradingView backtesting standards:Initial Capital: 100,000Order Size Type: Percent of EquityDefault Order Size: 25%Commission: 0.05%Slippage: 2 ticksPyramiding: 0Risk Cap Per Position: 5% (user adjustable 1–10%)These settings are used in the published version.If users modify these values, results will change.📊 Backtesting Notes• Designed for long historical datasets• Works best on equities or ETFs• Monthly rebalance recommended to generate sufficient trade count• Not optimized for short-term scalping• No forward-looking data is usedUsers should test across multiple assets and timeframes.This script does not guarantee profitability and makes no performance claims.📈 How To UseAdd to chart of a liquid equity or ETF.Select Monthly or Yearly rebalance.Choose allocation variant.Keep realistic commission & slippage.Backtest over 10+ years for meaningful sample size.📌 ImportantThis is a structural portfolio framework for research purposes.