I plot the portfolio equity curve as if I was always in. But now that you bring it up, it does raise the question of whether this is equity curve trading or simply trading my own personal "index." Not sure if this is just a semantic issue or a real one, since, as you point out, if you're not in the market the curve is a straight line and how do you trade that?:)
Sebastian --- In [email protected], "droskill" <[EMAIL PROTECTED]> wrote: > > Ok - got you - yes, I'm looking at the same thing. So here's the > question: if you're not in the market, isn't the curve just a straight > line? How are you altering your trading? > > --- In [email protected], "sebastiandanconia" > <sebastiandanconia@> wrote: > > > > 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" <droskill@> 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. > > > > > > > > > > > > > > >
