Hi Folks
This is the afternoon update from me on my $50K weekly gap strategy. After thinking about the issue I raised in yesterdays update about continuing to take all valid trades versus electing not to take some due to higher than expected open position cost, I decided to alter my approach to accomodate this problem. My decision was to reduce the weighting of the v2 gap setups (which are at 1.0 % of balance are a higher weighting than the v5 & v6 gap setups (0.5 % of balance)) to 0.5 % of balance, same as the v5 & v6 setups. Especially since the majority of open positions to date have been based on v2 setups, making this adjustment would free up a fair amount of capital. The cost of the adjustment unfortunately was some extra brokerage involved in partially closing out the existing positions (closing 50% of each position) - doing that freed up about $30K, bring the total cost of open positions (excl brokerage) down from about $76K to about $41K, allowing me to take the GMG trade that I missed yesterday, plus a new position in HVN which was triggered today. I took advantage of the fact that the portfolio was still up just after the open this morning, so made a few $'s on the volumes that I closed, clawing back a little from the losses in the first 2 weeks.
Below is the re-formatted table which shows the adjustments made to the various positions (CHC, CAR, ALL, BXB, LNK, NWS & TWE required adjustment) plus the 2 new positions in GMG & HVN (hopefully a little easier to read too):
I'm possibly costing myself some future profits in making the above risk adjustment to v2 gap setups, since these setups perform significantly better than the other 2 gap setups, however the objective of this initial 6 month period is to ensure I get the execution right and get some live performance data to substantiate the backtest data. During this process I prefer to err on the side of lower risk until I get the degree of comfort I need to increase the risk (as my risk tolerance increases) - and the extra weighting on the v2 gap setups is one of those money management techniques that is designed to maximise return vs risk (in addition to other measures I will introduce down the track after the probationary period).
Cheers, Sharks
- Forums
- ASX - Short Term Trading
- Short Term Trading Week Starting: 01 Feb
Hi FolksThis is the afternoon update from me on my $50K weekly...
- There are more pages in this discussion • 17 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
Featured News
The Watchlist
HAR
HARANGA RESOURCES LIMITED.
Peter Batten, MD
Peter Batten
MD
Previous Video
Next Video
SPONSORED BY The Market Online