I have started some new models that use more buy/sell rules than before. What I am noticing is new for models I use, but probably pretty routine for many.
My ideal holding size is 15 stocks. Yesterday I essentially wanted to add a stock that was new to my buy rules but there were no sells that day. I had to add cash before the rebalance automatically bought the stock. Obviously, I could have done this manually and adding cash was not a problem.
But also, I could have missed that it did not buy that stock if I were not paying attention.
Today a different port with this same strategy only bought 12 stocks and did not fully invest (leaving some cash). I would have preferred to put 100% into cash.
I am not interested in any platform changes from P123. I will start playing with the margin. I am okay if the port goes above cash to buy the 16th or 17th stock that day. And obviously, I am capable of adding cash, changing the ideal number of stocks each day or doing a few things manually.
I’m not sure I understand the question, but this simulation might help you: https://www.portfolio123.com/port_summary.jsp?portid=1652284. This holds approximately 15 positions and only sells a position if a new one is bought. Each new position is bought at 6.25% of the portfolio. Check out the bottom two charts, the trading system (especially the buy and sell rules and the rebalancing tab), and the transactions.
Thank you. Looking at the table of contents already makes me like this book. Not just about margin, it looks like. Some good stuff that I think is important. E.g., we do not use the geometric mean enough or at least I do not use it enough to make it intuitive.
And every time we think we see a trend we should do a runs test (which is in the book).