The Power Dip System had a great month in April, trouncing the indexes.
As always, The Power Dip System trial is free, and does not require anything more than an email address to sign up.
Equity Curve: 1% Risk, 10% Stop
Equity Curve: 2% Risk, 10% Stop
Equity Curve: 2% Risk, 3ATR Position Sizing/Stop
The stats and equity curves show that position-sizing based on the volatility of each stock is still superior to fixed position-sizing and stops. Even doubling risk from 1% to 2% is not working nearly as well as using volatility-based position-sizing.
If you have any questions about the Power Dip System, feel free to leave me a comment.
Terrific work. Not many systems can tout 70% win rates
Thanks LeFly.
Awesome. I’m curious; what happened to the system on the 1000pt drop day?
The stocks I was in did not stop out because I was using 3ATR position-sizing, and some of my stops were 20%+. However, some subscribers did get stopped out, only to have the rebound rub sand in their eyes. I suspect that some of those trades were broken. I have not run a test of that period in May because my data provider was still getting together all the data from the broken trades. I suspect that the 10% stop model, even if some of the trades were broken, got hit pretty hard. I’ll post results at the end of May.
The files/file names I tried to upload with the images of equity curves have a “%” in them. Evidently, WP doesn’t like % in file names. I’ll rename the files and upload the images this evening. Sorry for any confusion.
great work,
any stats on how pds would work if we switch to ATR model when 2 day ATR is above 50 day ATR
Bill
Bill, are you speaking of individual equity ATR or index ATR?
I’ve considered something like that before using SPY ATR, but not with individual stocks.
One of the reason ATR position sizing works well is because it has you taking larger positions in less volatile stocks and smaller positions in more volatile stocks. This normalizes the position sizes for volatility. The question remains if OVERALL market volatility should be a consideration and should drive switching between fixed position sizing and volatility position sizing.
Wooshedder- Among other things, your approach, and efforts are a reality check on several levels. Excellent work, thank you for sharing it.
Wood – would it be possible to see an equity curve for a longer period of time? Just looking at recent activity seems like the system had some relatively larger losers (IDIX, LEE, INFN). Allso the data you present have 10% stop , you seem to be using a larger one, which probably means larger potential drawdown? And if i may the last one – is the system focused on small and mid cap names or does it trade large caps as well?
jt, no problem. I will answer all of your questions in an upcoming post. Good questions by the way.
The system trades any stock of any capitalization that trades with greater than 1 mil liquidity a day and a 20 day average volume of 300K/day.