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Millowena:
I may not be the guru you are looking up to. I still become edgy with my DD. But I can probably give you some hints which may be helpful in improving a dip buy system.
For dip buy, the expectancy is very low, maybe just 1.1-1.3, at least for my system. To achieve high returns, you need to trade a lot. Position sizing is the key. Trade small positions 5%-10% of equity, use just time stops, do not use price stops, the small position sizes already control the risk. If your expectancy is different, you may need different position sizing algorithm. (BTW, if you buy dip and hold for big gain, it is not dip buy, it is trend-following. Dip buy means buying when a stop dips and selling when it bounces back for small profits).
Another consideration is market conditions as I already mentioned in another post. Use market-based indicators to identify bull/bear conditions. Only trade or use margin when market is bullish. Get out when market is bearish. The system is in the market for only 50-70% of time. This rule can greatly reduce DD and does not impact returns as much.
And do a lot of backtesting and some optimizing, I found Robert Pardo's book helps a lot in becoming confident with your backtest results.
Best Trading,
- Mark
----- Original Message -----
From: MillowenaJuno
To: amibroker@xxxxxxxxxxxxxxx
Sent: Tuesday, June 20, 2006 7:07 PM
Subject: Re: [amibroker] (OT) Re: Has anybody made any money???
Mark,
It appears you are doing something RIGHT, that the rest of us would like to
duplicate, or at least emulate.
I too buy dips and look for STRONG stocks that have shown me that the market
likes them too. Unfortunately, my results are nowhere NEAR yours..
Would you please share with us your system in sufficient detail to allow us
to learn how to have similar results?
Thanks!
Millowena
----- Original Message -----
From: "sebastiandanconia" <sebastiandanconia@xxxxxxxxx>
To: <amibroker@xxxxxxxxxxxxxxx>
Sent: Tuesday, June 20, 2006 12:39 PM
Subject: [amibroker] (OT) Re: Has anybody made any money???
> Mark, my trading now is along similar lines: Focus on strong stocks
> (my preference is small- and micro-cap growth) but ONLY when the whole
> market is strong.
>
> The main difference between our methods seems to be that you're
> deliberately buying on dips and I would only do that
> unintentionally.:) The practical outcome is that your returns are 2-3
> times what I can reasonably expect, but with higher drawdowns. One of
> the "market wizards" (I don't remember which one) once said that if
> you expect to double your money you have to be willing to lose 1/3 of
> it. Sounds like you're right in there.:)
>
> Thanks for the idea about the 5-8 day time-stops. It might only be
> applicable for buying on dips instead of buying into strength, but
> I'll look into it anyway.
>
>
> Luck,
>
> Sebastian
>
>
> --- In amibroker@xxxxxxxxxxxxxxx, "Mark H" <amibroker@xxx> wrote:
>>
>> Dr Gaine$
>>
>> My strategy is dip buying. When the market is bullish, buy strong
> stocks when they dip steeply and sell them when they rise.
>> The secret is to use time stops (5-8 days) to let your capital work
> harder for you.
>> The most difficult part is to sit tight when market is not good and
> also stomach the drawdown up to 40%.
>> Backtest helps a lot to pull the trigger when you are down 40%.
>>
>> - Mark
>>
>> ----- Original Message -----
>> From: richard gaines
>> To: amibroker@xxxxxxxxxxxxxxx
>> Sent: Sunday, June 18, 2006 9:40 AM
>> Subject: Re: [amibroker] Has anybody made any money???
>>
>>
>>
>> Share your strategy with us Mark.
>>
>> Dr Gaine$
>>
>> Mark H <amibroker@xxx> wrote:
>> Absolutely. Average 126% for the last three years.
>> But you should know that software are just tools and not money
> printing machines. It is what between your ears matters.
>>
>> ----- Original Message -----
>> From: tom_katch
>> To: amibroker@xxxxxxxxxxxxxxx
>> Sent: Saturday, June 17, 2006 7:04 AM
>> Subject: [amibroker] Has anybody made any money???
>>
>>
>> I own Amibroker software, and have the latest version
> (standard). I
>> also have Metastock, Vectorvest and some other software. But I am
>> sorry to say that Amibroker is the only software I ever bought
> that I
>> did not study up on. I understand that most of the users are very
>> pleased with it from looking at this forum. Most of the
> postings are
>> of a technical nature, with questions as how to understand and
> use the
>> software. But I don't recall seeing postings from people
> noting their
>> success in using the software. Have any of you had
> great/good/fair
>> success in using it? Have you made a lot/some/little money
> with it?
>> Maybe some of your positive comments will give me a kick in
> the ass,
>> and I'll start on the 800 page manual.
>>
>> Thanks
>>
>> Fred
>>
>>
>>
>>
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