Bit of a tedious week for me with firstly a small pressure sore on my hip, confining me to the sofa until I was able to escape it on Friday, but also as a consequence (because I am sure the posture on my sofa irritates the problem in my abdomen area), I was in quite a bit of pain and that was irritating me.
I have always had in the back of my mind that if things really got to a limit, then I would go up to Stoke Mandeville Hospital near Aylesbury, and I would present myself in Accident & Emergency and cause a bit of fuss. Anyway, that option has never really appealed because it would no doubt mean a long wait, but on Thursday it hit me that instead of rocking up at A&E, I could just show my face (well, the bit that wasn’t covered by a filthy mask) at the Spinal Outpatients Department and try to get something happening via that route.
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I finally managed to get an extra Spreadbet Account with igIndex and I started the Test System for my Index Spreadbets some days ago (incredibly, I still haven’t heard a peep out of CityIndex !!). Anyway, a couple of nights ago I looked at how far the FTSE100 dropped in March 2020 and worked out it was 36% at the worst level of Drawdown. You can see details of the Test System on my ‘Trades’ page on WD1.
It struck me I need to design my Rules and my System so that it can cope with a 36% Drawdown in its stride (although in practice, a 36% Drawdown would be extremely rare) and then it also hit me that really I should design for 50% Drawdown which I think some small Rule Changes will ‘easily’ manage and be mostly mechanical and just need a small degree of Hedging and the timing of those could be quite sloppy and not hurt Returns too much.
I have talked quite a lot on Twitter about a new Index Spreadbet System that I have been designing for about a month, and I have had long discussions with several friends regarding what the faults are and ways it can be refined and improved.
My intent was to produce a detailed Blog about the System and to includes loads of Examples of it in practice, but with my Health niggles that is too difficult at the moment, and for now I have just bashed something together quickly based on some email discussions with mates. The attraction of the System is that it is expected to generate in the region of 40%+ CAGR on the Initial Capital Employed and a higher ROCE based on the Average Capital used. In addition, it has controlled and limited risk and for most of a given year, we do nothing whatsoever – in fact, my biggest potential flaw that has been spotted is that if we Hedge too often, then the Returns will be reduced. |
Stocks & Markets WheelieBlogsThese tend to be more Markets and Stocks related and timely - the Blog Page on the Main WheelieDealer Website has the 'Educational' stuff (well that's the theory anyway !!). Archives
October 2021
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