Total portfolio equity is what I'm talking about. Take a portfolio that you have, run a system-test, chart the equity curve, then drag- and-drop a moving average on top of it. That'll give you an example of what I'm looking at with equity curve.
S. --- In [email protected], "droskill" <[EMAIL PROTECTED]> wrote: > > Sebastian - thanks for the response. However, I think I'm talking > about something different. I'm talking about using the overall > performance/equity curve of a portfolio to modify the rules associated > with a trading system. But maybe I'm wrong - what did you mean by: > > "I swing in and out of the portfolio (long only) using a moving > average of the equity as a "buy" area when the general market (SP500 > as proxy)" > > When you say equity in this case, do you mean portfolio equity? Or do > you mean AN equity (as in a single stock)? > > --- In [email protected], "sebastiandanconia" > <sebastiandanconia@> wrote: > > > > Coincidentally, I've just recently begun trading along these lines, > > with good success. With AB's ability to test and track portfolios it's > > relatively easy. > > > > My basic method: First, I use a stock screener to locate CANSLIM- style > > small-caps. (MSN has an advanced one, free and powerful. Major > > brokerages have them, too, for customers.) Second, I eliminate foreign > > issues from this list, keeping only domestic ones. I also "eyeball" > > all the charts, eliminating stocks with uptrends that are > > clearly "broken" but somehow sneaked past the initial screen, anyway. > > Third, I *randomize* the list by putting it in alphabetical order by > > ticker symbol. Finally, I choose the first 6 stocks on the list, and > > that's the portfolio I work with. Each issue gets an equal dollar- > > amount of money invested. > > > > I swing in and out of the portfolio (long only) using a moving average > > of the equity as a "buy" area when the general market (SP500 as proxy) > > is strong, and use a discretionary exit, i.e., I think the trade has > > made me as much as it's likely to on this particular upswing. > > > > Since the beginning of the year I've hit three wins on three round- > > trips, up about 14%. (Not a brag, because humiliation is only one > > trade away for us all, just pointing out the potential, considering > > that the SP500 and other major indices are still down for the year.) > > > > I don't do any position-sizing, and just trade the portfolio as if it > > was my own personal index. Only having 6 stocks might not seem like > > enough diversification, but it works surprisingly well. > > > > FWIW. > > > > > > Sebastian > > > > > > > > > > > > --- In [email protected], "droskill" <droskill@> wrote: > > > > > > I was wondering if anyone has any experience with trading the equity > > > curve itself as part of a system. In particular, I was looking for > > > feedback on approaches to being above or below the curve - did you > > > reduce/increase position sizes or the number of positions? What have > > > you found to be affective? > > > > > > Any feedback greatly appreciated - obviously I don't want or expect > > > anyone to give away a great system, but I thought it might be an > > > interesting topic for a general discussion. > > > > > >
