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Portfolio123 » List all forums » Forum: General Comments » Thread: Poll: What is the next strategy would you like to (or learn to) trade? |
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Total posts in this thread: 12
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marco
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Options:
---------------------------------------- Portfolio123 Staff |
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Capnpaul
Advanced Member
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Responding to OTHER: I've been standing by for years, looking forward to a suit of functions and factors that will allow better use of Technical Analysis in developing our systems and strategys. |
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rickg777
Advanced Member
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Marco, I second that. Technical Analysis would certainly round out P123's functionality. It would open up a new world of possibilities for strategies and hopefully make subscribing to other sites that do unnecessary. Anyone who "trades" verses "investing" uses technicals to develop their systems. Rick |
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Stittsville123
Advanced Member
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I voted other for more technical analysis as well. The problem here is T.A. is a very broad subject and could mean just about anything from better rules to better charting capability. What I am interested in seeing is Point & Figure "Charts" applied to buy / sell rules. I don't actually want to see P&F charts but I want to be able to create buy or sell rules based on P&F patterns. There are some great entry patterns for long term trading that may fit in very well with the fundamentals. With P&F it is easier to determine support and resistance levels (and more importantly express mathematically) and determine breakouts. Steve |
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Capnpaul
Advanced Member
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There is an opportunity to put the P123 Site on the cutting edge of Technical Analysis See my Previous Posting Note#3 on this very subject |
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dwrowley
Advanced Member
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It's funny - I was one of the vocal proponents for adding more technical functions to P123, specifically ADX, etc. (I traded for about a year or so purely using technicals, then got the fundamental religion and found p123). Now that we've recently got more technicals, I've been trying to use ADX, etc. to define better entry conditions - and I can't for the life of me come up with a method that actually improves my backtested returns! I'll keep at it every now and then, but for now I'm skeptical I'm going to make a significant improvement in my models using a lot of fancy technicals. Your mileage may vary! (And if it does, please tell me!) David |
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martinfierro
Advanced Member
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dwrowley: Funny, I went through the same problem. When using purely technical analysis, I found a few things that seemed workable. They never did in going forward. Since I got the fundamental religion, things have been going much better. Frankly, I think the main difference (perhaps the ONLY one), is that P123 uses a database without survivorship bias, while things like AIQ, TC2000, Zacks, etc. have this serious problem. Take, for example, Zacks. It is extremely easy to come with strategies that backtest with fantastic results. In every case I have been able to duplicate in P123, the results came down to zero or worse. In my mind, the key value of P123 is a good, clean database, with NO survivorship or other biases. Martin. |
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Koronbock
Advanced Member  GERMANY Joined: Jun 11, 2006 Posts: 166 Status: Offline |
I'd like to have SHORT capabilities added to P123 as soon as possible. Todays strong downmove in the stock market may be a harbinger of things to come. Marco, you said you are working on this SHORT capability for us. Any progress on this front? Thanks, Wern |
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marco
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A few projects with higher priority are being completed, but I expect to have the short sim soon. Starting a short port might take longer. Since we are talking about shorting I just found out that my broker, etrade, might be charging me interest even though my net positions is not margined. Take this example: 10,000 capital 10,000 in long positions 5,000 in long positions hedged by 5,000 short position. In a margin account the net of all this should not generate any interest expense. What appears to be happening is that my short positions are not generating any interest for me and I end up paying 5,000 in interest for the long positions I'm using in the hedge. Is there a broker that will do the right thing? I know that most individuals do not get the interest generated by shorts, but since I have a "preferred" status I though this was a given. Maybe all you have to do is ask... If you are considering shorting make sure you know exactly how this will be handled. Turns out that I've paid over 1,000 in interest in the past few months, essentially wiping out all the gains I had in my hedged pairs-trading strategy. I'll call them soon to see what they say. Not today though since the lines must be pretty busy after the melt-down  ---------------------------------------- Portfolio123 Staff ---------------------------------------- [Edit 1 times, last edit by marco at Feb 27, 2007 4:51:30 PM] |
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jtbaccarat
Advanced Member
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Marco, You just discovered another dirty little secret of the broker business. An institution would receive net margining using VAR or other method and they would receive lower rates and they would be able to invest the cash they get from the short position into a treasury note. One could argue this is all fair since the institution is a 'better' credit risk (history has shown that is debatable in many specific examples) and can also be chalked up in the category that bigger customers are easier to service. The little guy does not get net margining, pays higher rates on both long and short margining, and does not get to invest the cash from the short. It gets worse: the clients that are long a stock on margin have their stock in nominee name (i.e., in a margin account) not in client name (i.e., a cash account). This means that the stock you buy on margin is often lent to the other trader who sells it short. The broker does not take any risk, they make money on the spread between their borrowing rates and what they charge the little guy and they make money on the short rate on the stock that is 'owned' by the other trader (the long trader has no idea their stock is being lent at a profit to a short seller, but it is all in the trading agreement every client signs to get a margin account). It's a little odd when one thinks about it the first time, but that's the way it works, and its a great business if you're a broker: zero risk, charge both sides rates higher than what you pay; the risk is borne either by the long trader or the short trader, not the broker. Overall, it is an argument why stocks are a poor trading vehicle (I don't mean the underlying companies, just the mechanism of a stock): if the markets could be started again from scratch, stocks would not exist as is, they'd be closer to a future or other derivative (much more efficient for everyone including the client). Like every industry there are nooks and crannies that most do not have the faintest idea about. It's one of the most profitable(and last to be commoditized) parts of the brokers' business and they will not be giving this up any time soon, given that execution commissions are razor thin now. That said, much of the blame for the lack of net margining lies with the regulators as they are the ones who impose these regulations and have not allowed VAR and/or simple net margining. Margining for options and options with stocks are even worse. Margining across asset classes is even worse than that. All of these may be improved some day, but neither the regulators or the brokers are in any rush. Why? Because they can provide net margining, VAR, etc to the institutions already, because...they are institutions. The internals of shorting and buying on margin are another story; that is here to stay. If you need any other specific information on these or other intricacies I am willing to help; send me an e-mail. ---------------------------------------- [Edit 1 times, last edit by jtbaccarat at Feb 27, 2007 6:08:29 PM] |
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