Jim Dean Sage   Posts: 3022 Joined: 9/21/2006 Location: L'ville, GA  User Profile | Here’s a challenge to the “thinkers and try-ers” in the group. The next time you decide to run some PortSim tests to determine which strategies are best, or to fine tune parameters - *do it twice*. The first time, use the good ole %Equity method with compounding. The second time, run the tests the same way but using Fixed $ allocation. Maybe start with a bit more money (to avoid killing the account early on) - maybe $200k instead of $100k - but this is not essential. Then, separately evaluate the tests to see which strategies / methods / parameter-values bubble to the top and appear to be “the best”. I am sure that in many cases, the answers will be DIFFERENT. In those cases, my point is that the “right choice” - the one that is most likely to hold up well in future trading - will be the one based on non-compounded fixed $ allocation. [Edited by Jim Dean on 8/30/2018 8:09 PM] | |
