Mechanical Trading Systems

Link al post en castellano

When you combine two good and proven systems in the same portfolio, three outcomes are possible:

1. Both systems at the same enter or are in a drawdown
2. Both systems at the same time work fine
3. One of them works fine and the other one is in a drawdown

Fortunately we just have two systems in our portfolio so there are no more options. Common sense drives the probability of each option occurring. If both systems are solid and the leverages have been properly chosen, the more likely option will be the 2^nd, followed by the 3^rd and the less probable the 1^st. In fact the portfolio allocation is designed to get there.

Soon I hope I will be able to upload a new post trying to explain my vision about how to design a balanced systems portfolio. I have written something about this matter in the past, but nothing that has convinced me fully (*). Hope this will be the good one.

But let’s get into to the point: with regards to this portfolio that we have been following all over this year, I want to update the status here based on some inquires received.

Remember January’s balance showed a flat picture. That means, option 3. With yesterday’s close, the net balance for February and also accumulated is like this:

As you can see, now we are getting a good 17,9% YTD.

Let’s trust on this trend and on a better behavior.

Regards and good luck on your trading,

Horace

(*) unfortuntely no english translation is available on this yet.