October Stock Tipping Comp Tech's short term trading portfolio/test case

[dutchie]

That would probably be more realistic and more usable if the system was found to be profitable. How would you decide which stock to replace the one that has been stopped out?

It would also be interesting to see how the system performed by just buying them at the start and selling them at the end.

But if past performances are anything to go by if the any of the top finishers are initially selected then the system(s) will be profitable.

In regard to the starting price of the shares on the first day being different to the close on the previous day maybe it could be assumed that the shares are purchased at the closing price.

 

[doctorj]

I think you should include re-entry in the tests. It should be again limited to the universe of stocks in the competition. I like the idea of pyramiding one of the successful trades already opened, the only downside is that a larger position will require tighter stops for risk management which may not be appropriate for the volitility of the universe we'd be trading.

 

[tech/a]

Dutch

I would use the same criteria I used to initially filter---eyeballing the chart for OBVIOUS signs of forward movement.It maybe that some not selected show this a bit later down the track.
I may not find one!
I will be giving the results as you suggested if simply held as well.
After all if we cant out perform that then future buying will be a bit pointless.

Doc
If pyramiding I like to take the pyramid trade as a trade on its own with its own stop.
The exit remains common to both/all buys.
So the Pyramided trade could be stopped out while the original continues on.
I will say that Pyramiding is more successful the longer term you go.
You also need not pyramid a full parcel either.
For short term I would suggest partial pyramiding.50% or 33% increase in position size.

 

[tech/a]

Web has also now hit its 10% stop loss so will note that it would have been stopped out today at 42.5c.
I'll leave it in the system so as to record firstly how the method would go purely buy and hold.
When I have time I'll set up another which will be added and subtracted from.

 

[tech/a]

President Bush has been following our Portfolio.
This is how he has reacted to this months results so far!!

 

[canny]

Tech - is there somewhere we can view your results?

 

[tech/a]

Ill post them tonight.

 

[tech/a]

Boy this is ugly!!

There will be a lot to learn from this and I'm glad that its is all recorded.
These tables--DO NOT--include those stopped out or any re buys.They wont until the end.I'll just record all as buy and hold and as they get stopped or others are bought place them on this thread so the results can be updated at the end and compared.

Table (1) Is 12 best picks as of yesterday
Table (2) Is "A" List as of yesterday
Table (3) Is 12 best picks as of today
Table (4) Is "A" List as of today.
Table (5) Is The comp as of today.(For comparison later)

 

[dutchie]

Tech

Funny how most of the time the comp. is normally half in green by now.

Then when you go to test it for profitability, you get a start where nearly everything is red! (one of Murphy's laws no doubt).

(A few more red days and everything will be stopped out)

Anyway a good test, if this month ends up profitable then "normal" type months will be rolling in it.

 

[tech/a]

After a 200 pt drop in 2 days,And only a 12% total drawdown on a portfolio of basically small caps,only a few days into the comp,I reckon its doing well.

If all get stopped out then all get stopped out.
But there are even now things becoming apparent---which are yet to be confirmed--like stop distance.Those in profit could well be in loss--youll note they have only moved a tick or so up.

It wont take much to turn this around.
As time goes by stops may well play an important part in the final wash up.
I wouldnt be to concerned with a loss in a month either.

This is what reasearch testing, particularly live, is all about.
You cant cheat.
You cant kid yourself.
You can analyse the results and implement or retract ideas as the method is refined and an expectancy can eventually be calculated.

It is difficult to design a profitable discretionary/systematic methodology but that is the only way I believe a short term share trading method can be designed---and it will take time. Could well be worth it---a lot will be learnt.

I encourage anyone who sees something of note to bring it up for discussion.

 

[tech/a]

OK.

What we are trying to achieve is the best result from the portfolio.
So as part of an alternative to buy and hold we can implement stops and re buy stratagies.As I dont have the time to set up another portfolio I'll just record what would be done here and do the tabulation later when I have time---then we will be able to see if there was/is an improvement on the buy and hold.

Normally I would place a 10% of purchase price stop.So on a $1 share that would be 90c
That would mean that
GGY stopped at .075c
GOP stopped at .18c
PDN stopped at 2.21
PNN stopped at .55
WEB stopped at .42

Now as we are stuck with this portfolio then we will be looking at opportunities to buy back if they appear.
GGY is one that I actually bought yesterday at .067
I would be looking to re enter the test on GGY if it has a positive day
IE can maintain above yesterdays close.
All new stops would be 10% of purchase.

I'm thinking that short term and small parcels of $5k may thwart the stop methodology as brokerage may kill it.Anyway time will tell and this is one question that can be answered in this difficult period.

WEB I see as a buy above yesterdays close.
PNN at .48 above yesterdays high will be seen as a reversal,its at 61.8% retracement now.
PDN double bottom at 2.14 would have to hold and trade above yesterdays high.
GOP Looks horrible would need to fill the gap strongly and may not be a contender in future I would wait a while on this b4 considering again.

I will start a seperate portfolio record with this in it when I have time.
The tables currently being recorded will remain buy and hold only for comparison.

 

[Knobby22]

I just want to point out why I picked Qantas which many at the time probably thought had no hope. e.g. it didn't make the Tech/a list.

My guess was that there would be a correction this month and that the oil price would drop.

Qantas should gain from the oil price drop and having a high yield and low PE shouldn't fall, especially compared to the trading style stocks put in by others.

Unfortunately, so far it hasn't quite worked out as it has fallen a bit with the overall market but hopefully the lower oil price should start some bargain hunting soon and it may go my way yet.

 

[tech/a]

Knobby.

The last thing I want to do is have people judge others selections based upon my own methodology.
I get it wrong as often as anyone else.
The idea of the exercise is to develope a methodology that may be a profitable way to trade these selections.
I'm hoping people will add to the discussion with their own ideas which they can present as alternatives,additions or Hypothosis.I dont have time to run every idea.

Just because peoples selections dont make my list doesnt place the kiss of death on the selection--probably quite the opposite.

The other thing to remember is timeframe---selections like yours and I'm sure others may well take a while to materialise,and if they do in the month of the comp then you'll be right up there if not then it may occure in the next month or so.
Another reason why I'll continue the portfolio study of October until Janurary and Novembers till Feburary.

Because its so short term as well I'm influenced by my idea of selecting best "Bang for Buck" trades.

 

[Knobby22]

Tech/a, I didn't mean to infer in any way I was having a go, maybe my wording could have been better.

I knew that my choice would not meet a traders methodology.

I am also confident that many would have thought I was crazy picking a stock like Qantas which doesn't move much at the start of this month.

I just wanted to explain a different viewpoint, out of the square if you like.

 

[tech/a]

End of Week 1
Even a bit of a pullback even though the market was negative--6 rose in price of the 12 only 3 continued to drop --- 3 Flat.
"A" list faired even better.

 

[tech/a]

The list of 12 is still decreasing and the "A" list is creeping back.
The "A" list doing now the better.

To answer a question I've had raised by email I have included the sale at stop loss of 10% of purchase price on the day the stock CLOSED below this price at the CLOSE---so there is some slippage.
This list the Aussi A list Exit list is performing at the lowest loss.with 2 open trades still live.and a nett loss of about $842.

Note while BLR traded below its stop it never closed below it so is still live.

 

[tech/a]

For interest the total portfolio at $5k a trade statistics are.

Initial portfolio value $145,000
Current value $ 133,680
-7.81%

Average loss 11.85%

Average Gain 11.60%

% profitable 17%
% losers 83%

 

[tech/a]

Hasnt been a great deal of interest in this exercise.

However I have kept it going on "stator" portfolio software just to see what would happen a little down the track.

Many would remember that this was a disasterous competition month with only 3 traders I think being profitable out of the 20 odd.

I made up 3 portfolios out of the Comp selections.
(1) My selection of the 12 stocks I felt would perform the best of the comp.
(2) The best of those 12 in my veiw--- there were 5
(3) A portfolio of the 5 where a loss of 10% would be an exit.

These are just 3 possible ways of trading the list but the idea was to see if we could gain a better result than just buy and hold for a Month.
Now the "Improvements" were simply a condensing of the portfolio and taking a stop.

If you remember the result at the end of the month was a total portfolio loss of double figures.
While not a definative result in that this small test is conclusive the results I'm sure will be of interest to some.

I dont have the results of the whole portfolio.(Damn)

(1) Is now still -12.22%
(2) Is better with a loss of -8.3%
(3) Is in PROFIT by 5%

All % statistics are based upon INITIAL Capital expended on all trades IE $5000 each trade.

This was simply a selection of stocks from those trading here.
My point is that small alterations in the way you trade can have huge impacts on the result.Selection of stocks being the least important in my view.

If anyone wants the portfolio tables captured and placed on the forum let me know.

 

[Happy]

Tech/a,
October was probably tough month (usually is anyway).

Any chance to have a look at November and if too late, would it be possible to try again in December?

 

[RichKid]

Interesting to see what would occur if you had all trades taken with a stop at 10% and position size set according to volatility (or three arbitrary dollar amounts set by stock price eg $2k, $4k, $6k). That way little discretion but the effects of the stop would be clear. Maybe pyramid $1k on move of 10% from entry.... and then $1k once 20% from entry with the stop set at 10% max for toal position...just thoughts it's probably too hard to do....trying to cut losses and compound profits, that's all. We only need one or two big winners, we seem to have that in this comp in good months.