Mark Holstius Elite    Posts: 744 Joined: 10/11/2012 Location: Sleepy Hollow, IL  User Profile | Hi Keith... Sorry I didn't get back to you sooner, but I've been busy with family. Your question about the change in value overnight is a common one that's caused a lot of debate since OV was created. I'm glad you brought it up again, because it got me thinking about a way to test a couple of theories with my new portfolio. Unfortunately, I've found the tests take a number of hours to run, so I hope to have some interesting statistics later today or tomorrow. In the meantime, since you mention that you've limited your exposure to 150% until I’m happy with the portfolio I want to clarify something. The way to change or limit exposure / risk is thru the use of the "Trade Multiplier". The "Trade Multiplier" setting will determine the allocation % / trade. In my FTM portfolio, the strategies were constructed using 10% allocation, so setting the Trade Multiplier in the Portfolio at 40 will result in trades at 4% allocation. (Trade Multiplier of 20 will yield 2% trades). The "Max % Of Equity" determines how much of your account can be used. If set at 50%, half your account can be traded. If set at 200%, you can use 2X margin. The individual trade size, say 4%, will stay the same without regard to what you set as the Max % Of Equity - the only change will be the number of trades you'll be able to take. Using 40% Trade Multiplier giving 4% / trade (that means you use 4% of your Equity / trade - NOT 4% of Margin available or any lower equity available due to a <100% Max % Of Equity setting) : With Max % Of Equity at 100%, you have enough equity to have 25 trades open. With Max % Of Equity at 200%, you have enough equity to have 50 trades open. Raising or lowering the Max % Of Equity doesn’t affect the trade size, it just affects the # of trades you can have open at the same time. What I’m doing myself is setting the Trade Multiplier to 20% so that I take trades allocated at 2% of equity until I’m comfortable with how things are going with the portfolio. 4% has proven to give good results over the past 15 years, so I’m just being cautious using 2% for a while. You may want to do something else... Hope that helps, Mark [Edited by Mark Holstius on 7/23/2017 2:10 PM] | |
