OmniVest User Forums
General Discussion Topics
Account Settings and Elite Portfolios
28 replies, 3626 viewings
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OmniVest User Forums
General Discussion Topics
Account Settings and Elite Portfolios
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Last Activity 4/15/2019 7:43 PM 28 replies, 3626 viewings |
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Mark Holstius Elite    Posts: 744 Joined: 10/11/2012 Location: Sleepy Hollow, IL  User Profile |
The settings Nirvana uses on the Explore Omni Portfolios site are basically blank, so the results seen there will be different from those I post in the forum. I tried to explain that in my previous post, but it gets a bit complex. I’ll add a snag of the Account settings I use along with the necessary steps to do any further testing or exploring you may want to do (either with my Portfolios or any others posted on Elite). The following snag steps through the Account settings I recommend when trading with my “Follow The Money Rev02” portfolio, along with the location of the “Elite” tab in Omnivest. Using that tab is an excellent way to see the results for any Elite Portfolio using any Account settings you choose to use. It’s also a convenient way to experiment with different combinations of portfolios (try before you buy…). I hope this helps - let me know if you need more information. BTW - I’ve improved my portfolio and hope to have the new version up on Elite (along with details of the improvements) later today or tomorrow. Happy 4th of July! Mark [Edited by Mark Holstius on 7/2/2017 1:17 PM]  Attached file : Account Settings.png (640KB - 1121 downloads) | ||
| Mark Holstius Elite Posts: 744 Joined: 10/11/2012 Location: Sleepy Hollow, IL User Profile |
Once you subscribe to it, the link shows up next to every portfolio in any tab (Omni Portfolios / Custom / Community / Elite / etc.). It's an outstanding tool that I find myself using all the time - you only have to click on it to get a complete analysis and Monte Carlo run for the portfolio. Thanks again, Steve... Mark [Edited by Mark Holstius on 7/2/2017 1:52 PM] Attached file : Omnivesting.png (205KB - 1159 downloads) | ||
| Mark S Regular Posts: 56 Joined: 10/11/2012 Location: Barrington, IL User Profile |
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| tgrafa Regular Posts: 63 Joined: 10/11/2012 Location: Midland, Texas User Profile |
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| Mark Holstius Elite Posts: 744 Joined: 10/11/2012 Location: Sleepy Hollow, IL User Profile |
Here's a snag of how to get to the subscription page too; Mark [Edited by Mark Holstius on 7/3/2017 2:38 PM] Attached file : Omnivesting Subscription.png (62KB - 1103 downloads) | ||
| berklee Member Posts: 28 Joined: 9/16/2013 Location: Greenville, SC User Profile |
Just a quick thank you for such a detailed and clear answer to setting up the portfolio. With IRA accounts, if memory serves me correctly, in a long-only portfolio such as FTM02, there needs to be a 3 day period after closing a trade (pending settlement) before the proceeds can be applied to another trade. Use of proceeds from a trade that has yet to settle is considered "self-dealing" by the IRS. One way around this is to obtain Reg-T margin, however, this technically exposes one to UBIT (unrelated business income tax). [There is a second way that completely circumvents margin restrictions in IRA accounts - but that is another discussion, and definitely requires payment of UBIT tax... but there is also a way around this, though not simple, requiring a foreign account] Is there any configuration that needs to be enabled to enforce compliance with the 3-day "self-dealing" rule. Thanks, Lee [Edited by berklee on 7/3/2017 11:16 PM] | ||
| Mark Holstius Elite Posts: 744 Joined: 10/11/2012 Location: Sleepy Hollow, IL User Profile |
This has been discussed in the past, and is the reason many of us use Interactive Brokers (which now integrates well with Nirvana's servers / Trade Processor). IB's use of "margin" to cover the 3 day issue in an IRA eliminates the problem. For more info, see this thread; https://www.omnitrader.com/currentclients/omnivestforum/thread-view.asp?threadid=4469 LD has a good post a little ways down in the thread that I'll paste below (in blue). Happy 4th! Mark Subject : RE: OmniVest and IRA Accounts Posted : 3/22/2013 12:23 PM Post #24792 - In reply to #24781 I will start out stating that I am no expert in the subject matter being discussed. I wanted to intervene to make every one aware that the premise that this issue only applies to IRAs is not entirely true (IMHO). The rule actually says that Investors must settle their security transactions in three business days. This settlement cycle is known as "T+3" — shorthand for "trade date plus three days." By the way, T+3 becomes T+1 for options and Government Securities. Note - its not specific to IRA accounts. More information on it can be found here: http://www.sec.gov/investor/pubs/tplus3.htm The issue here I believe is more accurately described as a Margin Account vs a Cash Account issue. As the settlement date of trades is set by and regulated by the Federal Reserve (Regulation T). ALL firms settle trades on the settlement day – it’s the law. If you use a margin account - the broker will normally let you use the unsettled funds to make additional purchases. You may not be able to sell these securities until the purchasing funds are settled however. This issue is called "free riding" and is discussed further in the discussion below: http://sixfigureinvesting.com/2010/01/trading-in-ira-accounts-and-avoiding-free-riding/ Also - be aware that different brokers handle the "Free Riding" issue slightly differently - even though they are all addressing the same regulations. Sorry - I'm not sure that I furthered the discussion in a positive way. Just wanted to let everyone know that this issue is not specific to IRAs | ||
| berklee Member Posts: 28 Joined: 9/16/2013 Location: Greenville, SC User Profile |
Thanks for the reference. Here is a little pearl I have not seen mentioned in the past on the blog - may be worth a separate thread. If one sets up a self-directed IRA, one can trade on margin within the IRA but you would need to pay UBIT (unrelated business interest tax) on the gains. This type of account configuration is similar to that used for real-estate investing with IRA funds (or purchasing and holding physical precious metals, or cryptocurrency, with IRA funds.) One needs to know all the rules because there are lots of ways to mess up with this... but it does allow some more freedom. Basically IRA assets are transferred to a custodial account. An LLC is formed which is considered a pass-through and TAXID is assigned to the LLC. If there are multiple IRA's involved, TAXID's are assigned to each IRA (as they are considered partners of the LLC.) The custodian is then directed to invest in the LLC and each IRA becomes a partner of the LLC. The LLC needs to file a 1065 on a yearly basis (added accounting expense), and IRA beneficiaries holders will need to file end of year valuation with the custodian. The LLC then opens a brokerage account which is funded with LLC holdings. This structure is still subject to UBIT tax if trading on margin. However, if one uses a foreign entity (rather than LLC) into which the custodian invests IRA holdings, this is considered a "UBIT Blocker" where the profits are now recharacterized as dividends and the UBIT issue is circumvented. http://www.ubitblog.com/2012/04/07/how-ubit-blockers-avoid-debt-financed-income/ This needs to be structured with the guidance of a tax attorney. Best, Lee | ||
| John W Elite Posts: 654 Joined: 10/11/2012 Location: Sydney, NSW, Australia User Profile |
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| Mark Holstius Elite Posts: 744 Joined: 10/11/2012 Location: Sleepy Hollow, IL User Profile |
Not sure why Nirvana put that particular distinction in it "way back when"... or what difference it makes? I've always checked "Margin", even when using it in an IRA. Here are the pop-ups; I'd hoped to get a revision to the portfolio up today with some details about the changes, but the 4th of July festivities will probably mean I'll have to put it off until tomorrow. Mark [Edited by Mark Holstius on 7/4/2017 3:34 PM] Attached file : Cash.png (117KB - 990 downloads) | ||
| Mark Holstius Elite Posts: 744 Joined: 10/11/2012 Location: Sleepy Hollow, IL User Profile |
It's obvious to me that you have a better handle on it than I... Mark | ||
| John W Elite Posts: 654 Joined: 10/11/2012 Location: Sydney, NSW, Australia User Profile |
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| SteveL Veteran Posts: 189 Joined: 10/11/2012 Location: Boulder, CO User Profile |
Upon investigation, I found that the account with the missing trade was configured as a "Cash Account", and the other as a "Margin Account". Both accounts were fully invested, and each had a pending closing trade which would free up funds in each account. OmniVest requires AVAILABLE FUNDS to place a trade in an "Cash Account". Since the closing trade had not yet happened, the funds were not available. That constraint does not apply to a "Margin Account". I changed the setting on the "Cash Account" to a "Margin Account", and the pending trade appeared. | ||
| Mark Holstius Elite Posts: 744 Joined: 10/11/2012 Location: Sleepy Hollow, IL User Profile |
Mark | ||
| Buffalo Bill Member Posts: 28 Joined: 1/2/2015 Location: Stafford, VA User Profile |
What I dont get is when I run thru all of this I get a neg CAR, like -65 to -80% (Total wipe out of my acct). It makes no sense. Using 3 year LB, FTMrev06 As you work thru OV starting with "Select portfolios": ONLY FTMrev06 it shows a nice curve and +58% return/-2.3% MDD when I hit re-calc. Awesome Hit Config Portfolio, check the inputs, hit re-calc: 83%HR, 35% CAR, -1.3% MDD, 26 CALMAR - again, awesome THEN next step: Acct summary": Under my ACCT along the top the results are horrible 73%HR, CAR -66.4%, MDD 99.4% (!!) Avg Ann MDD 48% (!!) 2% per trade invested, yet below under the FTMrev06 portfolio itself it is excellent - 79% HR, +33% CAR, -2.6% MDD Makes NO SENSE. Have I mentioned I find the OV website cumbersome, confusing, too many little, separate clicks under different tabs that matter, unclear as to what does what, uses different terminology than OT (setting 40% to get a 4% per trade allocation? makes no sense), etc The website is so bad it will turn off many/most potential investors when they cant figure it out or navigate it in a coherent, logical way. I have been delving into it for over two weeks solid and it still confuses me, and I know OT inside and out so I have that advantage over someone coming in cold. This is a terrible way to present a product So I have NO CONFIDENCE in OV and how it is set up because of this situation. Right up to the very end it looks good, then BOOM there goes everything. My TP settings are good, trade mult settings good, everything looks good except... Attaching screenshots. The numbers are different on the pic vs above (used different look back time), but the SAME result: FTMrev06 stats (great) and my acct stats (horrible) end up totally different even though FTM is the only portfolio I have selected BTW I have signed up for FTMrev06 and have it set to trade automatically via the TP Hoping you can help [Edited by Buffalo Bill on 7/7/2017 7:31 PM] Attached file : OV confusion.jpg (471KB - 243 downloads) | ||
| Mark Holstius Elite Posts: 744 Joined: 10/11/2012 Location: Sleepy Hollow, IL User Profile |
Welcome to the forum! Glad to have you as a subscriber, and sorry to hear you’re having problems setting up OV. (Thanks for the screenshots - they help a lot) Hmmm. I just set up an account using $10,000 starting and everything looks fine; Here are some hints using a $100,000 test account I use; Here’s a snag of what stats come from where… (using FTM Rev06 over last 1 year on the Accounts page) This is where you can verify what OV is using for it’s “Test Settings”… Finally, you can change the timeframe displayed in the “OV Stats” line on the Account page by adjusting the “Timeframe” chosen on the Portfolios page. The same page where you choose which portfolio to trade and the “Trade Multiplier” value. (covered in detail further up in this thread) Please try setting things up using the Portfolios page in OV and not via the “Explore Omniportfolios” part of the site at all and see if that works for you. (Using the details further up in this thread). Hope that helps, Mark [Edited by Mark Holstius on 7/7/2017 8:19 PM] Attached file : 00 10 Thousand.png (243KB - 835 downloads) Attached file : 01 Margin 1yr.png (265KB - 844 downloads) Attached file : 02 Find test settings.png (263KB - 833 downloads) Attached file : 03 Portfolio page choices.png (241KB - 795 downloads) | ||
| Mark Holstius Elite Posts: 744 Joined: 10/11/2012 Location: Sleepy Hollow, IL User Profile |
I've gotta run for the evening, but I just noticed that it looks like you're using / saving the Account Settings from the "Configure Account" in Explore Portfolios page. They're VERY different from the ones I recommend. Please go thru the steps further up in this thread and set it up from within OV's portfolio page, etc., using the settings I recommend. I think that'll solve it - though you still may have some issues with the size of commissions if the account is $10,000 and not margin. I'll have to look at that more tomorrow... hope that helps. I suspect others might have the same problem, so thanks for posting your question. Mark [Edited by Mark Holstius on 7/7/2017 8:36 PM] | ||
| Buffalo Bill Member Posts: 28 Joined: 1/2/2015 Location: Stafford, VA User Profile |
I went thru everything, incl defaulting the test settings, trying to match your settings as outlined in this thread and get the same CONFUSING result. It looks great until the final acct summary page where my acct reads down 50% (CAR -43.2%, MDD -43.3%) while the FTMrev06 stats right below that are CAR +60.5% MDD -2.2% Makes NO SENSE. Yours is the only profile used Did I mention the OV website is ridiculously cumbersome and has stuff buried all over the place which obviously has great effect Nirvana - are you reading this? This website will scare customers off | ||
| Keith Parsons Member Posts: 25 Joined: 3/12/2014 Location: Durban, South Africa User Profile |
Its well worth while reading Steve Mayo's post in Omni Vesting headed "How does OmniVest work?" Its a little outdated but clarifies / explains a number of points. Like you I was also getting confused. Rgds | ||
| Mark Holstius Elite Posts: 744 Joined: 10/11/2012 Location: Sleepy Hollow, IL User Profile |
You raise some good questions and observations. I'll start another thread later today (I hope) that'll attempt to show how to set up an account from scratch in OV as easily as possible using some screen captures. Until then - hope you enjoy the weekend. Thanks for your patience - I'm sure some others have the same questions, and I don't show my portfolio entering any trades Monday. Mark [Edited by Mark Holstius on 7/8/2017 7:03 AM] | ||
| Buffalo Bill Member Posts: 28 Joined: 1/2/2015 Location: Stafford, VA User Profile |
NOTE: Figured it out. Deleted the acct and started over but still had the same issue. It had to be something in the Acct settings itself, so I messed with those. Changed each, saved and looked at results It was the "commissions" setting I used Clicking "settings" then "commissions" I had set the min commission to 7.0000 $ per trade min (bottom selection) to match MB trading. Deselecting that fixed it. I *KNOW* that a $7/trade commish does NOT ruin the return, esp over just one year, so my GUESS is that selection is not working properly It would be nice if I could set that to match my real commission structure to more accurately look at my potential results Setting that to even $1 cuts results DRAMATICALLY (car cut >60%) If others could look at that and see it would be good [Edited by Buffalo Bill on 7/8/2017 8:19 AM] | ||
| Mark Holstius Elite Posts: 744 Joined: 10/11/2012 Location: Sleepy Hollow, IL User Profile |
What you observe makes perfect sense - and I'd planned on posting about it soon. My Follow The Money portfolio takes a LOT of small trades. The combination of a high HR and small allocations lessens the risk somewhat through diversification. There's a price to be paid though - the commissions can be a negative factor if you're trading a small account. This can be mitigated somewhat by increasing the allocation / trade (size of the trades), but there's a tradeoff in increased risk if a trade goes against you. I'll put together a table illustrating some of the combinations when I have time, but could you do me a favor? Please do a screen capture of your account settings using the procedure below, and confirm that the account is using $10,000 and whether you plan on using margin or not...? Thanks, Mark [Edited by Mark Holstius on 7/8/2017 11:09 AM] Attached file : settings capture.png (264KB - 759 downloads) | ||
| Mark Holstius Elite Posts: 744 Joined: 10/11/2012 Location: Sleepy Hollow, IL User Profile |
Here are 2 snags of what happens as far as commissions being a factor when we do lots of small trades in my Follow The Money portfolio... using the IB commissions. The first is a series of Equity graphs in a $10,000 IRA progressing down in allocation per trade from 5% / trade to 1% / trade. The effect of commissions gets rather dramatic at 2% & 1%. The second is a similar series of Equity graphs in a $5,000 IRA progressing down in allocation per trade from 5% / trade to 2% / trade. The "commissions cliff" occurs at 3% / trade... Sorry, it's just a ratio. Sigh. Notice on the last graph above that the HR is still 79% - but even the relatively low IB commissions are killing it. Hope this helps... Mark [Edited by Mark Holstius on 7/8/2017 11:48 AM] Attached file : Commissions 10K Account.png (344KB - 753 downloads) Attached file : Commissions 5K Account.png (282KB - 736 downloads) | ||
| Buffalo Bill Member Posts: 28 Joined: 1/2/2015 Location: Stafford, VA User Profile |
First off I REALLY appreciate the help. I hope it is useful to others Interesting illustration on commission effects for small accts (really, all accts). It is something that is far too often ignored or minimized. I put in the MB commission into my settings and played around with it. By going 2x on the trade multiplier for FTM06 it works. Ends up at a min 10% allocation/trade to make it work in a cash acct. I can accept that risk level, plus using a broker stop set at -5% (via TP) I was planning on running OV in a small cash acct to see how it works before going all-in, but obviously need to get it into margin status soonest. Already sent in another $5k, will get in the other $10+ ASAP. Here is the capture Thanks again! Attached file : OV acct seetings.jpg (150KB - 254 downloads) | ||
| Mark Holstius Elite Posts: 744 Joined: 10/11/2012 Location: Sleepy Hollow, IL User Profile |
That shorting possibility in your Account Settings shouldn't be a problem with my portfolio, since all my strategies are constructed to be Long Only. They're also constructed to trade at 10% of Equity, which is why setting the Trade Multiplier to 20% gives 2% trades. You mention "By going 2X on the trade multiplier for FTM06 it works." Can you clarify that some more...??? If you've set the Trade Multiplier to 200%, the trades will be 20% of equity - and with the settings allowing 5 trades / symbol it'd be possible to have 100% of your equity in a single symbol. That may have worked with the historical data, but would definitely be a curve fit & very questionable going forward. A screenshot of the recent simulated historical trades generated in your account would answer the question. BTW - Here's a link to an excellent synopsis on setting up an account for trading that might answer your question in the screen capture about trading starting balance...??? https://www.omnitrader.com/currentclients/omnivestforum/thread-view.asp?threadid=7786&posts=1 Hope you're having a nice weekend, Mark |
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