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Portfolio123 » List all forums » Forum: Simulations and Portfolios » Thread: Single Stock Portfolio |
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Total posts in this thread: 3 |
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skim90
Member
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New to 123. Can anyone tell the merits or returns from using one stock traded at a time in a portfolio (not the same stock). To me it would mean reduced brokerage and ease of management. Has anyone used this type of portfolio? |
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greyhound_dog_1
Advanced Member UNITED KINGDOM Joined: Oct 12, 2006 Posts: 20 Status: Offline |
Hi I refer you to a current thread under discussion entitled 'Robust or Bust?'. Generally, the consensus is that the performance of a single stock portfolio would be as good as random, and that you shoud aim for at least 20 stocks, if not 50, to ensure forward performance will reflect the simulation. Interactivebrokers offer $1 per trade, low commission, ideal for trading large or high turnover ports. Andrew ---------------------------------------- Andy |
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BJS
Advanced Member
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I'm not sure I would call this a consensus. Some members take th opinion that 40 or 50 stock portfolios are necessary to give realistic expectations. Others use a combination of 3 to 5 stock portfolios to spread risk. This can be done if you have a very strong ranking system. For example, I have a real port that only holds 2 or 3 stocks at a time. It only has two buy rules: 1. Avgdailytot(20)>150000 2. Rank>=99.95 And it has only 1 sell rule: 1. Rank<99.95 The strength is all in its ranking system. Right now it is holding 2 stocks. I have been trading this with real money since July of last year, and it is doing fine. But note that the drawdown is 30%. With small ports like this, you do need to be able to stomach the drawdowns. But I also have other 'small' ports, so I have my money spread out between several different systems. The point is, there are many ways to approach a winning trading philosophy. Find one that fits your style, and you enjoy trading. Take the time to test it and paper-trade it. If everything looks right, don't let others tell you that it can't be done. Brian ---------------------------------------- 
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