Normal
yes I did.PologiesA contradiction in terms. Reality is that we will lose some money at times but overall we wish to be nett profitable---very profitable. Losing money in small amounts to open opportunity for larger profits is to me a wise way of managing money.The other option of locking into an investment and waiting patiently for that time to come where demand exceeds supply isnt attractive,particularly at 50+. My goal is capital gain and I cant understand people who invest purely for passive income,particularly as the value of our dollar deminishes year after year ( In 10 yrs time what will $500,000 buy you?) So If I retire at 55 and live till 85 thats a long time to support yourself as things get dearer.So I take it you dont have these figures.So without them I will explain importance to those who are wondering.If I know that my loss will be capped at 2% (as an example) and that my longest string of losses over x period of testing is say 6 then my initial worst case drawdown would be expected to be 12%.Now if I was to trade on Margin at 2.5 leverage then thats 30% of initial capital---that would be pretty well a maximum for me with any system.If trading CFD's then there is a potential at 10x leverage to lose 120% so from a risk veiw--I'm not going to leverage anywhere near that!Average winners to average losers is important in that I can expect if I have say a win of 1 to every 3 losses to take around 30 losing trades to complete a fully functional portfolio of 10 stocks.So would it be wise to buy 10 stocks on day 1?---cashflow may become an issue and if trading margin a huge issue.Im afraid I have to disagree with your disagreement.Todays high could be tommorows low from the point of veiw of today.Now take a look at the chart below.Remember that the maximum risk I allowed myself on this and any other trade is actually 1% in this case on buying.That was around 36c.Profit on the trade was $8.10 per share.In a shorter timeframe yes true.Duc been through this before.The Average hold for this longterm system is over 1 yr so having open trades for longer is commonplace.Infact we have 1 over 3 yrs now and a few other over 2 yrs. Initial trades were expected to have some stop outs as the portfolio took time to do its thing ( find strong trends) so over the last 3 yrs only stops and 1 long term closed trade and a few that lasted a few months are recorded---about 9 from memory.Open equity is massive and as I have pointed out above if all crashed to their exit around $60K of the $305K current would be lost so Say loss of $60K then payback the margin loan $70K leaves $175K on the initial $30K over 3.5 yrs.Wouldnt be unhappy even with that!Well thats not true either Very high profit can be generated from (and T/T does),a very high reward to risk ratio.Its actually around 12 x risk.Its not reliant on leverage we selected Margin as a method to trade back 3.5 yrs ago as most people are undercapitalised so felt this would be a good example for those with average funds looking for better return. I know of one trader using T/T who trades $700k of Super--no leverage and he seems happy!Firstly it may not have failed,it would however no longer have a blueprint that matched actual trading. Back to this in a minute.Ive covered this before but the outperformance is the outperformance of the mean average return of 20000 portfolio's traded in Montecarlo simulation.To explain.The highest return was say 45% and the lowest 22% un leveraged,(Just using figures to illustrate cant remember the exact ones) The results of the one I'm trading and the portfolio on the net are toward the top of the scale.But back to the above. Thats an interesting question I have had a chance to think about since you last bought it up.See the results are an average or all trades (Each individual portfolio) so at times then the return even for years could well be way above the highest average,yet when averaged over say 8 yrs this is not seen.Same is true of drawdown and is defined in Maximum Peak to Valley Drawdown.This makes sence to me that if the P/V drawdown is exceeded then you stop!! However if the performance is greater than the AVERAGE you couldnt say its failed as you dont know the maximum growth with in the average. Even so why stop trading something that is doing better.It could also be argued that you could and perhaps should reset the systems test x years down the track and get a "NEW BLUEPRINT" which would be different to the old.
yes I did.Pologies
A contradiction in terms. Reality is that we will lose some money at times but overall we wish to be nett profitable---very profitable. Losing money in small amounts to open opportunity for larger profits is to me a wise way of managing money.The other option of locking into an investment and waiting patiently for that time to come where demand exceeds supply isnt attractive,particularly at 50+. My goal is capital gain and I cant understand people who invest purely for passive income,particularly as the value of our dollar deminishes year after year ( In 10 yrs time what will $500,000 buy you?) So If I retire at 55 and live till 85 thats a long time to support yourself as things get dearer.
So I take it you dont have these figures.
So without them I will explain importance to those who are wondering.
If I know that my loss will be capped at 2% (as an example) and that my longest string of losses over x period of testing is say 6 then my initial worst case drawdown would be expected to be 12%.
Now if I was to trade on Margin at 2.5 leverage then thats 30% of initial capital---that would be pretty well a maximum for me with any system.
If trading CFD's then there is a potential at 10x leverage to lose 120% so from a risk veiw--I'm not going to leverage anywhere near that!
Average winners to average losers is important in that I can expect if I have say a win of 1 to every 3 losses to take around 30 losing trades to complete a fully functional portfolio of 10 stocks.So would it be wise to buy 10 stocks on day 1?---cashflow may become an issue and if trading margin a huge issue.
Im afraid I have to disagree with your disagreement.Todays high could be tommorows low from the point of veiw of today.Now take a look at the chart below.Remember that the maximum risk I allowed myself on this and any other trade is actually 1% in this case on buying.That was around 36c.
Profit on the trade was $8.10 per share.In a shorter timeframe yes true.
Duc been through this before.The Average hold for this longterm system is over 1 yr so having open trades for longer is commonplace.Infact we have 1 over 3 yrs now and a few other over 2 yrs. Initial trades were expected to have some stop outs as the portfolio took time to do its thing ( find strong trends) so over the last 3 yrs only stops and 1 long term closed trade and a few that lasted a few months are recorded---about 9 from memory.
Open equity is massive and as I have pointed out above if all crashed to their exit around $60K of the $305K current would be lost so Say loss of $60K then payback the margin loan $70K leaves $175K on the initial $30K over 3.5 yrs.
Wouldnt be unhappy even with that!
Well thats not true either Very high profit can be generated from (and T/T does),a very high reward to risk ratio.Its actually around 12 x risk.Its not reliant on leverage we selected Margin as a method to trade back 3.5 yrs ago as most people are undercapitalised so felt this would be a good example for those with average funds looking for better return. I know of one trader using T/T who trades $700k of Super--no leverage and he seems happy!
Firstly it may not have failed,it would however no longer have a blueprint that matched actual trading. Back to this in a minute.
Ive covered this before but the outperformance is the outperformance of the mean average return of 20000 portfolio's traded in Montecarlo simulation.
To explain.The highest return was say 45% and the lowest 22% un leveraged,(Just using figures to illustrate cant remember the exact ones) The results of the one I'm trading and the portfolio on the net are toward the top of the scale.
But back to the above. Thats an interesting question I have had a chance to think about since you last bought it up.
See the results are an average or all trades (Each individual portfolio) so at times then the return even for years could well be way above the highest average,yet when averaged over say 8 yrs this is not seen.
Same is true of drawdown and is defined in Maximum Peak to Valley Drawdown.This makes sence to me that if the P/V drawdown is exceeded then you stop!! However if the performance is greater than the AVERAGE you couldnt say its failed as you dont know the maximum growth with in the average. Even so why stop trading something that is doing better.
It could also be argued that you could and perhaps should reset the systems test x years down the track and get a "NEW BLUEPRINT" which would be different to the old.
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