thanks
@peter2. I always wish I was doing better, but then this is partly why we track results: compare your work to your backtests, and remind yourself that +5.7% in 2 months is good! Before I started looking at TA and system design, I was going to be happy getting 10% in my managed fund. If I can get 10% p.a. then it will prove to myself that I don't need to pay someone and I'm capable myself. As it currently stands, I do believe I am capable of getting greater than 10% returns and outperforming a managed fund. I think either 1 of my systems could get at least 10% in a year.
You are right that I haven't managed a portfolio through a bear market. While I can tell myself that I can do it, and stick religiously to my system, the proof will be in the pudding. Even now I avoid or ignore market analysis on the TV as I tell myself, "it doesn't matter, I only care about what happens at the close each week". I've even told mates this at work. I tell them the beauty of a weekly system where the only thing that matters is not where the price is mid-week, but rather where it finished on Friday. I can only hope I can hold this mentality in a 2008 event. I have backtested my systems through bear years, and 2008, and while they lose they still perform well. But if I lose 14% one month, and then another 10% another month, then gain 5%, then lose the next month .... that will be an emotional rollercoaster! No one wants to see that kind of hit to a portfolio. It'll be a little easier with my smaller account (ironically) but what's a $6000 loss on a $30,000 account? sure, it's a big hit, but not as much a $20,000 on a $100,000 account! I also like to remind myself that the year after bear markets my backtesting is phenomenal. Huge gains (like most trend/momentum systems).
I'm actually trialling 3 systems (I just haven't put up results for the 3rd). At the moment I am definitely favouring 1 over the other (system 2 over system 1). But even with that being said, I haven't given up on system 1. I still think its viable, even though I think I wont implement it. I think it will have to be reworked. It was my first system so not surprising it may not make the cut! I also want to trade 1 system on my personal money, and 1 system within a SMSF that I intend on starting (when I have a system I begin the process to start the SMSF). This is also partly why I started a 3rd system in the background.
@Newt is right, learning never stops. I certainly haven't. I mention the other instruments as I have a few ideas for other trading systems for other instruments (not including the other ideas for systems in equities that I have mentioned before). I have definitely been influenced by Clenow and his works and his rather simple momentum strategy, or even his MA crossover for futures. It would likely be 3-5 years, if not longer, before I started with any real money on those. Knowing this, I will eventually get proper data, backtest, and then forwardtest/incubate as I am doing now. But my first goal is, first and foremost, to be profitable and consistent trader with my currently designed systems.
You are definitely right about different markets moving differently. I know that any system I design for a US market will be different to an ASX system. Different participants, environment, etc., means different market forces and therefore different market behaviour. Whatever I design will be robust enough but still tailored to the market I want to be in.
So many possibilities .... but so little capital hahahaha.
I was actually rather ignorant in regards to leveraged ETFs. I knew you could use margin to buy ETFs, but I had no idea that some ETFs were already leveraged before you bought them. It certainly opens up a whole new realm of possibilities.