PureBytes Links
Trading Reference Links
|
<SPAN
class=173411621-17092003>here's the short trade list and comments I posted
earlier:
<SPAN
class=173411621-17092003>
<SPAN
class=173411621-17092003>--------------------------
<SPAN
class=173411621-17092003>these are the first two trades in one of the stocks at
100% positionsize:
<SPAN
class=173411621-17092003>Profit
Position948.62 10,000.00276.68
10,948.60
<SPAN
class=173411621-17092003>the first trade made $948.62 profit, which the second
trade invested, takinga $10,948.60 position.
<SPAN
class=173411621-17092003>here's the same two trades at 10%
positionsize:
<SPAN
class=173411621-17092003>Profit
Position94.86 1,000.0025.51
1,009.49
<SPAN
class=173411621-17092003>the first trade made $94.86 profit, but the second one
invested only 10% ofthat profit, taking a $1,009.49 position.
<SPAN
class=173411621-17092003>--------------------------
<SPAN
class=173411621-17092003>
<SPAN
class=173411621-17092003>seems pretty clear, and not what i'd
expect.
<SPAN
class=173411621-17092003>
<SPAN
class=173411621-17092003>I am looking forward to 4.5's enhanced portfolio
testing capabilities, but in the mean time, I'm trying to make sure I understand
how things work now. Tomasz, if you have time for a comment, it'd be
appreciated.
<SPAN
class=173411621-17092003>
<SPAN
class=173411621-17092003>thanks,
<SPAN
class=173411621-17092003>
<SPAN
class=173411621-17092003>dave
<SPAN
class=173411621-17092003>
<BLOCKQUOTE
>I
can't see you trade list but am I correct in assuming that there is gap
between all exits and the next round of buys ? If so then I see your
point, if not then this could be a factor. I think all issues like
this will get resolved in v4.50 ... until then ...Fred--- In
amibroker@xxxxxxxxxxxxxxx, "Dave Merrill" <dmerrill@xxxx>
wrote:> fred, I appreciate your patience with me, must be I've got
a blind spot> today... or not...> > I shouldn't have
brought up total account growth rate at all. of course that>
depends on whether you're inveesting the actual account size or ten
times> that.> > and I do understand Tomasz' msg that
percentage profit shown for each stock> is relative to the total
account balance. that means that if each stock> invests 1/10th as
much, its percentage return will be 1/10th as large.> >
> but did you look at the individual trades I posted? why are only
10% of the> profits from the first trade invested in the second
trade when positionsize> is 10%?> > it seems to me
that this is the reason that the dollar return on each> individual
stock in the 10% case are disproportionately low, less than> 1/10th
of the 100% case. the entry price, exit price, and percentage
price> change are the same in both cases. what's different is the size
of the> positions taken -- 90% of any profits made don't get
reinvested, so they> don't compound.> > am I making
any sense, or still deluded?> > dave>
> It's not about POSITIONSIZE ... it's about COMPOUNDING
...> > AGAIN ... The first situation you described
was 10 stocks each of> which trade the full account balance
.vs. the second situation which> was 10 stocks each of
which trade 10% of the account balance.> > This is
simple math ... situation #1 compound an order of
magnitude> faster then situation #2>
> i.e.> > Situation 1 w/10% gains
on each stock means account balance is> DOUBLED after the
first set of trades, QUADRUPLED after the second> set and
so on ...> > Situation 2 w/10% gains has a 10% gain
after the first set of trades> and 21% after the second
set and so on.> > So after both are done with the
first set of trades there's a 10x1> ratio in gains, but
after the second set the ratio is 20x1 ...
Yahoo! Groups Sponsor
ADVERTISEMENT
Send BUG REPORTS to bugs@xxxxxxxxxxxxx
Send SUGGESTIONS to suggest@xxxxxxxxxxxxx
-----------------------------------------
Post AmiQuote-related messages ONLY to: amiquote@xxxxxxxxxxxxxxx
(Web page: http://groups.yahoo.com/group/amiquote/messages/)
--------------------------------------------
Check group FAQ at: http://groups.yahoo.com/group/amibroker/files/groupfaq.html
Your use of Yahoo! Groups is subject to the Yahoo! Terms of Service.
|