Methodology
The stock market is a minefield. If you don't have a plan, follow someone who has one.
Some strategies have been
profitable
through all market
conditions
for more than 16 years. Choose those corresponding to your goals and
risk tolerance. Execute them ignoring the news and the charts. Follow a
plan
consistently with discipline and without emotions. Connect to your
trading account five minutes a week and free your mind the rest of the
time.
We have various portfolios corresponding to various goals. They are for informational
purposes. We are not a Registered
Investment Advisor and this is not investment
advice.
- YPAFI Market Neutral (weekly): Investing in stocks without fearing the next crash.
- YPAFI Growth (weekly): Seeking superior risk-adjusted returns.
- Books.
Robust Strategy Design
We elaborate strategies starting from fundamental and technical analysis research. We do our best to detect and avoid curve-fitting. The period of simulation is as long as possible depending on data availability, most of the time since January 1999. This period covers all conditions and two market cycles.
The Luck Factor
Luck does exist. With the same probability to win (p) and the same average win/average loss ratio (w/l), your account may experience very different possible futures depending on the sequence of gains and losses. Example with w/l=1,4 and p=50%:
We select only strategies with a focused beam of possible paths, like this one:
To evaluate robustness, we use a probabilistic indicator taking into account the data sample size. Every model is an approximate representation of a real phenomenon. It is impossible to reduce the risk to zero or to predict the future, but it is possible to detect when a strategy goes out of its normal limits.
Psychological Risk
Even a good strategy may have a 30% drawdown and stay negative during months. It is easy to imagine, but harder to live. It is better to invest less capital than giving up under pressure with a good strategy. Without a long term vision, the short term makes no sense.
* CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.
Terms of use, disclaimers and Contact
Copyright
©
2014. All rights reserved.
