The analysis and grading system discussed in part one will look something like this but have more in depth data and calculations and filtering systems along with the ability to categorize based upon the data and pull the information to a coversheet where it will have a summery of the findings that is more clear.
more detailed breakdown and how sub categories will work.
At this point, it is mostly just a concept in my head that I have recently started to get on paper along with a brief draft of one aspect of what it will look like and how it is possible. I don’t even know how far I am going to be able to take this spreadsheet and how much can really be automated, vs how much I will have to manually setup. I have a number of real rough, general pictures in my head of all these spreadsheets and how they will work together so that I just press a few buttons (ideally as few as possible, but as many as necessary for quality results) and get a result, some of which I manually will go into finviz and look over and then look at charts and assess risk/rewards from however many I want, sort those by best available (ideally streaming updates) by expectations per equal unit of risk, and combine them together into the risk simulator to see how the broad strategy will help me meet my goals, so I know how those pieces fit within the broad strategy. With that in mind, the spreadsheet will pull a combination of the possible trades into different categories, make suggestions which I will be able to confirm by adding it to my trading journal for tracking, categorizing and reviewing my results in a way that looks at what I did, what condition the market was in and other variables that I want to be able to track and review over the course of many years to continue to look at areas I need to improve, trades I need to avoid making, trades I should make more of and strategies that could use some tweaking. My trading journal then will be able to adjust to reflect the “best fit” match relative to the target “allocations” and what not, and hopefully account for fees and evaluate whether or not the benefit is worth the costs of “rebalancing” and/or adding new positions and provide a suggestion on position sizing or a look at some simulations of how it would look assuming all opportunities are available and reflect reality.
But to go from conceptual rough draft to an actual concrete set of spreadsheets and what not is a huge leap. One step at a time. The first step will be to really get into the specifics of what I want just one of these spreadsheets to accomplish, and work from there.
Since I have done work on the position sizing/trading system simulator, I have a few adjustments I want to make, likely before year end.
1)Allow the spreadsheet to add in deposits or withdrawals on a per trade basis.
2)Allow the spreadsheet to adjust the “drawdown killswitch” AFTER subtracting the amount added after each trade and adjusting for the drawdown not including deposits.
3)Allow the grand total gain to subtract all capital added and starting amount to get a net gain.
4)Binary Yes/No function if drawdown killswitch is hit so you can track percentage chance that you hit the drawdown killswitch over X trades or less to potentially simulate the percentage of traders over a time frame that meet those results.
5)Consider adding in a “target goal” that functions as a “reverse kill switch” where trading is halted after goal is made
6)Binary Yes/No for “target reached” so you can estimate percentage chance of reaching target in X amount of trades or less given the assumptions you plugged in about expectations of the system(s).
7)Secondary portfolio targets and dynamically adjusted risk – Set it up so IF a particular portfolio target is reached, the risk percentage per trade is then adjusted and/or the amount deposit/withdrawn is adjusted to simulate reaching a goal in which you will attempt to retire from job while managing the sudden need to withdraw from account while being more conservative in your strategy. OR so you can increase the chances of getting to your target so if you get really close you don’t take unnecessary risk to get there at the cost of greater volatility that is not needed if you have traded well
8)Experiment with correlated trades held simultaneously with the same trading system. (the results of one influences the probability of another)
9)If that works, experiment with correlated trades held simultaneously with DIFFERENT expectations (such as a stock trading system combined with an option trading system) with different risk amounts
10)… ideally some sort of adjustment is going to have to be made to allow different average holding periods so the simulation can match up to more accurately reflect the timing of the trades.
11)If you can do 8 and 9, you should be able to set it up for up to 5 simultaneous trades for up to 5 unique “trading systems” simultaneously within portfolio, but may require a lot of busy work.
12)Come up with ideas to test a lot of different assumptions/strategies.
13)Use the spreadsheet to do a lot of testing of those assumptions.