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Fred,
Let me rephrase, my definition of compounding is one invests a % of
equity. As simple as that, even if it is 5%, 10% does not matter. It
is nothing to do with one position, or 100 positions.
In your example, one is ALWAYS 100% invested, per my definition, it is
compounding. If, as you example, one uses a fixed TOTAL amount, say
$1M, even if one has acquired through investment a gain of $2M, then
it is NOT compounding. I agree with you here, it is not real life
investing style not compounding.
As for if any one is withdrawing money out of the gain to enjoy the
fruit is nothing to do with compounding.
If I vote, I would vote for (in that order)
1) real portfolio testing and real positionsizing along with it.
2) 2-D surface chart included
3) MCS
4) Allow users to manipulate all the report statistics. (Someone asked
for addColumn() for optimize, scan... is a start)
Thomas
--- In amibroker@xxxxxxxxxxxxxxx, "Fred" <fctonetti@xxxx> wrote:
> Thomas,
>
> I'm not sure you got my point ... but maybe you did and I just don't
> follow your reply. I hadn't even gotten to talking about how
> positionsize = in AB relates to what people do in real life trading
> but it's my contention that for those that think they are not
> compounding by using positionsize = positivenumber and that this is
> the way they trade in real life, that if the number of positions
they
> are taking times the positionsize number continually approaches
> available equity and that equity is increasing over time that this
> too is a form of compounding even if bet size never changes. This
of
> course would be done in real life by one allowing more postitions to
> be taken rather than by increasing bet size.
>
> Fred
>
> --- In amibroker@xxxxxxxxxxxxxxx, "tchan95014" <tchan95014@xxxx>
> wrote:
> > I agree completely. I think any time in a system design, if one
> does
> > NOT use positionsize OR use position = negative value, then one is
> > compounding. That is when one use % for positionsize input then it
> is
> > compounding.
> >
> >
> >
> >
> > In Fred's example, it is positionsize = -100 (100% reinvested) OR
> > positionsize is NOT used at all (default = 100% reinvested)
> >
> >
> >
> >
> > Thomas
> >
> >
> >
> >
> > --- In amibroker@xxxxxxxxxxxxxxx, Fred Tonetti <ftonetti@xxxx>
> wrote:
> >
> >
> > > Regarding whether one in real life trading compounds or not it
is
> my
> >
> >
> > > contention that EVERYONE trading stocks or MF's compounds in one
> way
> > or
> >
> >
> > > another. (Futures because of the inherent leverage is a
> different
> > ball
> >
> >
> > > game).
> >
> >
> > >
> >
> >
> > > By this I mean if today you have $1mm in equity and you get a
buy
> > signal
> >
> >
> > > or a bunch of buy signals you invest your $1mm in one vehicle or
> you
> >
> >
> > > invest $10K each in potentially 100 vehicles i.e. you
potentially
> > get
> >
> >
> > > 100% invested. By the time you have grown that original $1mm to
> > $2mm
> >
> >
> > > you are either investing your $2mm in one vehicle or you are
> > investing
> >
> >
> > > $10K each in potentially 200 vehicles i.e. you potentially get
> 100%
> >
> >
> > > invested.
> >
> >
> > >
> >
> >
> > > Isn't this the way we all invest/trade ? Are those that say
they
> >
> >
> > > disdain compounding really saying that when they've grown their
> $1mm
> > to
> >
> >
> > > $2mm that when they get a bunch of buy signals they are still
> > investing
> >
> >
> > > only $1mm and leaving the other $1mm in money market ? If
that's
> > what
> >
> >
> > > you're doing then I'll take you at your word that you are not
> >
> >
> > > compounding and have accepted the fact that over time you will
get
> >
> >
> > > declining returns on a percentage basis, but if you are
> potentially
> >
> >
> > > investing 100% even as equity grows then you are compounding.
> You
> > may
> >
> >
> > > not be increasing bet size but you are compounding never the
> less.
> >
> >
> > >
> >
> >
> > > Fred
> >
> >
> > >
> >
> >
> > > --- In amibroker@xxxxxxxxxxxxxxx, "Bob Jagow" <bjagow@xxxx>
wrote:
> >
> >
> > > > Fred,
> >
> >
> > > > Though I innately rebel at pyramiding, AB would afford me
great
> >
> >
> > > pleasure by,
> >
> >
> > > > as a 1st step, accepting subsequent buy signals that
deserving
> >
> >
> > > > tickers.triggered.
> >
> >
> > > >
> >
> >
> > > > Regards,
> >
> >
> > > > Bob
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