Converting from trading 1 asset to a portfolio requires changes to my daily routine

[lmseldin]

I have recently converted from trading 1 asset as a positional trader to trading a portfolio of 13 assets. Also, I am trading more frequently mostly because I trade more assets. My original strategy I have traded for 19 years.

I thought the learning curve to convert would be minimal, but I am surprised as how much of this is new and how my daily routine had to be changed much more than I thought.

My original strategy was traded twice per year and required very minimal monitoring. I could skip days without watching the market as I already knew when I would exit months in advance.

Now, I use my software to give daily buy/sell signals for 13 assets for a mechanical system. I make about 2 trades per month and keep long term for trend trading. The old system was also mechanical but I already knew the rules for many years, so I did not need to back test anymore.

Just running the software daily is a big change... lol. Also, I would have days to plan a single trade and I would know in advance position size, limit price, etc.

Now my software runs in the morning. To make things easier I learned to keep position size with fixed dollar amounts that I will adjust every quarter or every six months. So that position size is now pre-calculated in advance. Also, since there are 13 assets, I don't know them as well as when I traded 1 asset.

I also had to find software that would calculate my paper open profits (got that today). I did not want to use my broker and keep logged in for security reasons. What I do, is put the asset symbols, position size and price into a phone app so I can see this daily.

Also, based on trader advice, I run the software in the morning before the open, so that data has been fixed and corrected from the night before (I did not know this was an issue and this was a surprise). However, this gives me less time to plan my trades and because I am new, gives me some stress because at first I am calculating things manually. I have now created an excel to help, so this is much easier. I just plug in the closing price and everything spits out.

I also had to figure out how to adjust my trading size, since my new strategy had previously open positions that I could not take, because I started trading in real time after the signals were given on some assets.

Anyway, seems like there is much more I had to learn than I thought. The good thing is that I had good knowledge of back testing and analysis of 19 years.

Also, a new issue that I am attacking is planning for events such as "my internet connection" does not work, or my laptop breaks, or software does not run. The reason, is I am dependent on my software running daily to give me my buy/sell signals.

What are your thoughts?

Larry

 

[Sekiyo]

What are your thoughts?

Maybe I am just tired because it's EOD,
But this thread is over my head.

If something requires you to change your daily routine,
Then what can we say ? Nothing. Go for it.

It's what you do that defines who you are.
Are you willing to say goodbye to your old self ?

Do you have more to earn than to lose ?
Would you make it even if you lost in the change ?

Best wishes.

 

[deaddog]

I have recently converted from trading 1 asset as a positional trader to trading a portfolio of 13 assets. Also, I am trading more frequently mostly because I trade more assets. My original strategy I have traded for 19 years.

What was wrong with the old strategy?

I thought the learning curve to convert would be minimal, but I am surprised as how much of this is new and how my daily routine had to be changed much more than I thought.

Why are you surprised? You are now doing 13 times more work.

My original strategy was traded twice per year and required very minimal monitoring. I could skip days without watching the market as I already knew when I would exit months in advance.

Hopefully you still know when to exit.

Also, a new issue that I am attacking is planning for events such as "my internet connection" does not work, or my laptop breaks, or software does not run. The reason, is I am dependent on my software running daily to give me my buy/sell signals.

What are your thoughts?

Larry

I'm not sure how much outperformance you hope to achieve but I'm guessing with 13 positions and equal position size you will tend towards average. Hope your time is worth it.

 

[MarkBrown]

hone the edge you have on what you trade - shotguns are for people that can't aim worth a crap.

so ask yourself are you a sniper rifle or a old fudd's shotgun ?

 

[easymon1]

1) Relax, Have a homebrew. Think about it with a pencil and pad in a quiet room.

Go in gradually with a well thought out, organized, clear, scheduled plan of action.

Don't post here but for your own use:
How important is it to reliably continue your current system? Rate 1 to 10.

How vital is speed to the deployment of your new unproven scheme? 1 - 10?

How important is it to minimize the losses incurred due to "Fool Tax" imposed
anytime one does something for the first time. "Oh sht, didn't see that coming!" lol. 1 - 10?

Why not go in small and ramp up the "bet size" as you shake things out?

How many things could go wrong?
What are they?
What can you do about preventing that.
.. and on like that.

If you still feel like going forward with it after all that, then there's no reason that you can't put it together. Maybe it'll even fly. Break a leg.

 

[lmseldin]

The reason I switched strategies:

- Feel that I lower risk, where I previously put all $$$ in 1 asset, I now spread this out. In addition, back testing has shown better back testing results which include lower draw downs and higher pay out.

As was mentioned, 13 times more work, never realized how much that was. Also, had to modify my daily routine. Also, more prone to human error since, I make many more trades than twice a year. In addition, I needed changes to my use of software for monitoring since before I would just peruse the markets less frequently.

Definitely feeling that I am still learning and not over the learning curve hump during this initial implementation of this new strategy.

The insight is that I did not feel there would be such a learning curve including daily routine changes for switching strategies.

 

[easymon1]

higher pay out

In round figures, what would you say will be the outcome of a well implemented process in terms of higher payout on an average monthly basis?
What are your costs in terms of hours and general disruption to your routine?
What else could you be doing with all of that time, opportunity costs?

13 times more work

more trades than twice a year.

Twice a year is pretty light duty, no?
-20 times more work at first, then taper off to where you can establish a more streamlined process as more experience is gained?
-Start a business with the time and effort you are preparing to dump into this?
-Find a newsletter that provides a track record and that gives specific recommendations with entry and exits clearly defined via daily updates? Steve Rhodes tfnn.

 

[lmseldin]

Warning this is a long response...

Easymon1,

I have found your survey questions very illuminating.

PS. I sent you a private message...

Thank you for sharing your insight...

Larry


Easymon1 survey questions:

"In round figures, what would you say will be the outcome of a well implemented process in terms of higher payout on an average monthly basis?"

Original system was based on low risk, trading very infrequently with no losses, but I back tested with less profit. The goal was a low risk strategy with a beautiful 45 degree equity curve.

However, when I went back to analyze my old system over 19 years, I was surprised (and very happy) it actually beat the market, but not by a lot. I always did not like the risk of only 1 asset, but this system was so easy to implement and hardly ever watched it.

I had more time to devote to trading and wanted to find a higher APR with low risk and using a portfolio. Took a while and now I did that and am trading it. This has several % higher back tested APR for the year and of course with compounding produced results I am happy with. I like using a portfolio which I am hoping for by my analysis to produce lower draw downs. I also purposely chose minor optimization to focus on higher success rates for wins and losses, rather than a higher APR with higher draw downs and less frequent wins.

"What are your costs in terms of hours and general disruption to your routine?
What else could you be doing with all of that time, opportunity costs?"

This new system, just takes a few minutes run in the morning. However, because I am new to it, it took a while to make each trade, so that I don't want any human errors. Now, I am using an excel to help and it makes things much easier. Now, excel calculates, # of shares, monitoring, etc. Much better than last month in terms of time. The negative is that I must literally run this mechanical system daily to get my signals. The benefit is that I limit my emotions. This is very important that it be a mechanical rather than discretionary system.


"Twice a year is pretty light duty, no?"

This system looking back has been very good to me. Very infrequent monitoring, fit my style of not making a lot of work for me. Very low draw down with high success rate. However, good or bad, it beat my benchmark, however, I "wished" I could get the large profits of successful day traders, swing traders, etc. Never happened for me and a pipe dream.... lol


"-20 times more work at first, then taper off to where you can establish a more streamlined process as more experience is gained?"

I think this is correct. Now, I run my mechanical system in the morning. Takes a few minutes and if no signal, done for the day. If there is a signal, that takes much more work for the day. For buy entries, I place GTC limit orders, etc. I would much prefer to run my system after the daily close. However, I found out that during the night, data is corrected. Also, daily close #'s are not provided by my provider until 11pm at night, when I am sleeping. This is very important to make sure I have good data. So now I run my system in the morning.

"-Start a business with the time and effort you are preparing to dump into this?"

Great question...I guess that is what I am doing. Trying to capture an additional couple of % APR for the year. Does not come for free, and my cost so far is more time than I expected.

"-Find a newsletter that provides a track record and that gives specific recommendations with entry and exits clearly defined via daily updates?"

This is not for me, to rely on others. Same with not using a black box. In fact, all my systems get back tested. I get ideas buy reading books, magazines, internet, etc. However, huge majority of the systems I back test fail miserably during analysis. I never understood why so many authors have written about systems being successful and when I back tested them, they almost always fail miserably over the long run.

"How important is it to reliably continue your current system? Rate 1 to 10."

I have stopped my current system after several weeks with the new system. Now that $$$ is involved, the results will speak for themselves. (Liberally paraphrase of Jesse Livermore book...lol)


"How vital is speed to the deployment of your new unproven scheme? 1 - 10?"
I guess an 8. But in reality, how long is "how long it takes". I was not going to implement a system unless everything lined up. This takes so much time...

It took a lot of work to finally decide to trade this. Much back testing, much false starts, assets that were not liquid, etc. For me, I need at least 20 years of data for any asset I will use.


"How important is it to minimize the losses incurred due to "Fool Tax" imposed
anytime one does something for the first time. "Oh sht, didn't see that coming!" lol. 1 - 10?"

Very important, in fact I probably triple and quadruple checked to ensure no mistakes for actually placing trades and I STILL MADE MISTAKES!!!!

"Why not go in small and ramp up the "bet size" as you shake things out?"

Mentality was to trade small and test. After several weeks of paper trading, and then trading small size, I pulled the plug to trade with size, because I felt I would lose a year's worth of profit because I stopped my old system.

"How many things could go wrong? What are they? What can you do about preventing that... and on like that."

I did not predict that even with my multiple checking on the physical buys, that I would still make stupid mistakes. My excel seems to have corrected this. Now, in real life, I am checking to make sure (hoping that my back test results will replicate in actual trading). This has not been confirmed. Too soon to tell...

Traders,

Thank you for sharing your insight and feedback.
Much appreciated.

Larry

 

[easymon1]

Warning this is a long response...

Easymon1,

I have found your survey questions very illuminating.

PS. I sent you a private message...

Thank you for sharing your insight...

Larry


Easymon1 survey questions:

"In round figures, what would you say will be the outcome of a well implemented process in terms of higher payout on an average monthly basis?"

Original system was based on low risk, trading very infrequently with no losses, but I back tested with less profit. The goal was a low risk strategy with a beautiful 45 degree equity curve.

However, when I went back to analyze my old system over 19 years, I was surprised (and very happy) it actually beat the market, but not by a lot. I always did not like the risk of only 1 asset, but this system was so easy to implement and hardly ever watched it.

I had more time to devote to trading and wanted to find a higher APR with low risk and using a portfolio. Took a while and now I did that and am trading it. This has several % higher back tested APR for the year and of course with compounding produced results I am happy with. I like using a portfolio which I am hoping for by my analysis to produce lower draw downs. I also purposely chose minor optimization to focus on higher success rates for wins and losses, rather than a higher APR with higher draw downs and less frequent wins.

"What are your costs in terms of hours and general disruption to your routine?
What else could you be doing with all of that time, opportunity costs?"

This new system, just takes a few minutes run in the morning. However, because I am new to it, it took a while to make each trade, so that I don't want any human errors. Now, I am using an excel to help and it makes things much easier. Now, excel calculates, # of shares, monitoring, etc. Much better than last month in terms of time. The negative is that I must literally run this mechanical system daily to get my signals. The benefit is that I limit my emotions. This is very important that it be a mechanical rather than discretionary system.


"Twice a year is pretty light duty, no?"

This system looking back has been very good to me. Very infrequent monitoring, fit my style of not making a lot of work for me. Very low draw down with high success rate. However, good or bad, it beat my benchmark, however, I "wished" I could get the large profits of successful day traders, swing traders, etc. Never happened for me and a pipe dream.... lol


"-20 times more work at first, then taper off to where you can establish a more streamlined process as more experience is gained?"

I think this is correct. Now, I run my mechanical system in the morning. Takes a few minutes and if no signal, done for the day. If there is a signal, that takes much more work for the day. For buy entries, I place GTC limit orders, etc. I would much prefer to run my system after the daily close. However, I found out that during the night, data is corrected. Also, daily close #'s are not provided by my provider until 11pm at night, when I am sleeping. This is very important to make sure I have good data. So now I run my system in the morning.

"-Start a business with the time and effort you are preparing to dump into this?"

Great question...I guess that is what I am doing. Trying to capture an additional couple of % APR for the year. Does not come for free, and my cost so far is more time than I expected.

"-Find a newsletter that provides a track record and that gives specific recommendations with entry and exits clearly defined via daily updates?"

This is not for me, to rely on others. Same with not using a black box. In fact, all my systems get back tested. I get ideas buy reading books, magazines, internet, etc. However, huge majority of the systems I back test fail miserably during analysis. I never understood why so many authors have written about systems being successful and when I back tested them, they almost always fail miserably over the long run.

"How important is it to reliably continue your current system? Rate 1 to 10."

I have stopped my current system after several weeks with the new system. Now that $$$ is involved, the results will speak for themselves. (Liberally paraphrase of Jesse Livermore book...lol)


"How vital is speed to the deployment of your new unproven scheme? 1 - 10?"
I guess an 8. But in reality, how long is "how long it takes". I was not going to implement a system unless everything lined up. This takes so much time...

It took a lot of work to finally decide to trade this. Much back testing, much false starts, assets that were not liquid, etc. For me, I need at least 20 years of data for any asset I will use.


"How important is it to minimize the losses incurred due to "Fool Tax" imposed
anytime one does something for the first time. "Oh sht, didn't see that coming!" lol. 1 - 10?"

Very important, in fact I probably triple and quadruple checked to ensure no mistakes for actually placing trades and I STILL MADE MISTAKES!!!!

"Why not go in small and ramp up the "bet size" as you shake things out?"

Mentality was to trade small and test. After several weeks of paper trading, and then trading small size, I pulled the plug to trade with size, because I felt I would lose a year's worth of profit because I stopped my old system.

"How many things could go wrong? What are they? What can you do about preventing that... and on like that."

I did not predict that even with my multiple checking on the physical buys, that I would still make stupid mistakes. My excel seems to have corrected this. Now, in real life, I am checking to make sure (hoping that my back test results will replicate in actual trading). This has not been confirmed. Too soon to tell...

Traders,

Thank you for sharing your insight and feedback.
Much appreciated.

Larry

Wow, that's a lot of progress in a short amount of time. Congrats.

 

[MarkBrown]

For me, I need at least 20 years of data for any asset I will use.

it's not the number of years that matters it's the number of bars.

20 years of daily is only 5,000 bars

20 years of hourly is close to 200,000 bars

trade frequency also has an effect on dependability testing.