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Hello everyone. My name is Bukalov Ilya The Profit Investments project.
At this video I'm going to tell you how to distribute securities holdings with investment instruments
and how to do it by counting
You can see the Portfolio Solver program which you can download here for free
In distribution disk there are excel files where you can find a detailed description of counting process
In that description you can see all formulas and there are no secrets here
And I will tell you some specific vocabulary which is used there
In addition to that you can read the book which you can see on the web site
Here you can see them. I highly recommend them to read
The main characteristic we should define for all trade instruments is Optimum F (this term is from the book)
And I will tell you what does it mean. Name is not so important but this characteristic is very necessary and I will tell you how to count it for each trade instrument
Here you can see the Excel file and at each page you can find histories.
Trade intruments are in the first column.
The programm accepts the same amplification so in the first column should be the history in percents
I will show you an example and how to launch and open that but for now is some theoretical material
About formulas. In order to count the optimum F there is a little bit difficult caltulation
That is a dip sweeping of accounts with a one thousandth move. It tends to one.
So the optimum F is account from zero to one. Or we find the most optimal account by the dip sweeping.
It means that it's a number by which this formula gives the maximum profit
It is named - one plus required F, deal which is taken from the history and this one is the maximum loss which is taken from the deals
Here is the maximum loss
And the minus is in the formula because there is a minus in the maximum loss account
And other things in formula are excel's accounts, don't pay any attention on it
The main idea is to take each deal from the history and using this formula enter the market
So this account is your profit after closing-out. It's shown in percents
So in this column we have accounts of each profit and each deal and entering to the market
In order to count with a condition or real trading you should
multiply these accounts. Multiplying these accounts you get the all-round account.
It is made in this column. Multiply these accounts and just normalize them (put them into power and find this power's root from the quantity of lines in this column)
As a result we have these accounts as real profits. In other words it is profit we could get if we traded this way using optimum F
So the task reduces to simplicity - we should just find the maximum account in this line and look which F account accords to this maximum
So we can see that the highest point is nearly here (0.9 F)
We can use Excel functions to count. It's just necessary to find the maximum account in this line and look what F account it accords to.
So and now I will tell you about the meaning of the F.
If to go deep to this formula this parameter means which part of the instrument is allowed to enter to the market to get a peace of the profit (in this case 0.03%)
When we found the maximum account of the profit we found the most acceptable F it means if we would enter to the market with this peace of our instrument
we would always take the maximum profit from this instrument
It is obviously that we found the maximum loss using the formula (risk) and we can see in the history what maximum loss can be
We should just multiply this peace to this deal
And it is easy to suppose that the instrument will trade with these probabilities to get losses
We've just used the simple math to count this parameter
And I think that everything is clear with this parameter
You can see a green thing here. What's it? It is just an indicator of possibility to reinvestment.
That is the maximum accound we found here we look if it is more than 1 or not.
If it is less than 1 it means that the instrument comes to loss. Or if we always invests to it we will lose everything.
And if it is more that 1 we can reinvest to it and it can make profit.
For example another one instrument we can see that it's less than 1 and everything even didn't count at all.
And there is no optimum F by which we could get profit
As all the instruments are different they can have the different maximum loss
It can have different percents. One can earn +30% -20% and +30% -20% and in sum it gets 20% of profit
And another one can be +3% -2% +3% -2%
In order to normalize them or to come them to any comparison
Because this parameter is not nomalized relatively to the maximum loss
We should divide F by the maximum loss and we have a normalized parameter which helps to compare instruments
And now I'm going to show you how it works in the program
I am launching it, opening the file (example) it's located in the distribution disk
There are the same instruments we have recently seen
This program works using the first column and lists and launches that all
And now let's open this... It's launched
here we can see two tables. In the lower one there is a counting of this parameter of each the instruments
Here it is visible that they have already been launched. Here is the Optimal F (it's counted), max loss
And this is the parameter which I was talking about. It is normalized (Optimal F divided by max loss)
Using this parameter we can order these lines and see the most confidential instrument is.
In this case we see that Veronica is the most confidential and Sven is on the second place
Everything we could say intuitively because it's obviously by watching the history (losses, grafics)
But here we can see that in exact values in numbers. As usual a grafic of balance is linear without high bursts
it can have a high accounts in the 4th column I am showing
And if you want to work without using this account you can work with the optimal F account
Looking at this column is not difficult to say if it is good or bad instrument
And Max loss just normalizes the concrete account
As you see the optimal F is nearly the same and it's not difficult to say that these instruments are not bad
One losses 7% and the other 17%
Probably, the less someone loses the less it earns and round.
The parameter optimal F takes into account all the risks
And probably they can earn different amounts. May be Veronica earns less but more stably and it's weight is higher of course
And the reinvestment column just shows if it is possible to or not to reinvest
And as we saw that with the manager he had this red thing in d column (less than 1)
In the higher table we see the combinations of these instruments
And what is written right here it means that it's impossible to count the parameter because there is no negative loss
If we open this we see the minimal profit is not negative
And here is the same. Of course it's imposible to count because it's not known what risks are there. It looks like that this instrument is profitable but it is not so.
And right here it's written that this instrument is absolutely profitable and it's advantageously to invest etc.
And next what happens with the higher table. In this table all combinations enumerate possibilities of instruments we have counted
excepting which ones which will not be in combinations because if we add them to anywhere they take 100 percents of investments
And it's obviously that they can be used with the combinations with the instrument correctly.
That is why Panamera and Galaxy are not in these combinations but other ones are in
Combinations compile by twos and as you see we have 3 free instruments and 3 combinations by twos
There is counted the same parameters - Optimal F and Max loss. True profit account can be there as well. Also Weight is counted too.
This account as I said is located in the first line right here. It is maximum suggested profit you can get entering into the market with this optimal F
It is shown in percents, here is 2.5%
And here is shown that it's not profitable and here is too 5.2%
History size parameter means that each instrument has the different amount of histories. It's noramally.
And now I will tell you how it works and some words about weights
First of all additional weights are chosen ramdomly. It matches combinations of all weights with 0.1 step. I will say about it in details later.
In other words it maches weights to multiply with Optimal F parameter. We suggest that we enter into the market with this account
and in this coulumn you can try to increase or decrease accounts to find the most profitable account
This accounts are searched and an instrument enter into the market proportionally to this weight (F multiplied to additional weight)
And right here in the History size column is written the longest size of a history. But if an instrument has a less size (it's become recently) the other instrument gets involved till it has a history
It is obviously while the old instrument trades - it trades with the 100% weight. Because it doesn't have anything to share it's capital
And when the history of a new instrument becomes (for example 30) the old one starts sharing it with the new one and it matches the accounts of additional weight parameter (0.1 0.9 or 0.2 0.8) etc
And it finds the most profitable account - disered profit (here is 2%)
And with this maximum profit these weights are saved. Looking at that all we see that maximum profit has Sven
Here we see a bit less (0.51%) anyway Sven leads. OnlySuccess harmed the account a bit
Sven,Veronica is more interesting because it has more significant percent (20% and 80%) and weight as we see is much higher
It's obviously that it is achieved by the less account of loss. It is because the instruments worked together and compensated each other
And as we counted the estimate is less but the weight is more and max loss is smaller than here
In this case this combination is the most profitable. If we look further we see that OnlySuccess harms the picture, Veronica copes with it well with the larger weight
It can be used alone of with Sven, almost there is no difference.
And here we see that they work by ones. All of these we could watch without combinations, numbers and histories. And would be obviously too to not invest in OnlySuccess
and Sven with Veronica are obviously leaders. A lot of people invested and commented them.
But numbers counted it all and we can firmly say that it is.
This kind of analysis is useful because it allows to not spend a lot of time on analysis of instruments and other things
the only thing is needed is to write the history to the first column, inserts (I recommend not to do a lot of inserts) not more than 5-7
the more inserts you make the more combinations it makes and it takes a lot of time to program to open them
as you see I have about twelve inserts ant here you can see that it is unreal amount of combinations (500000)
It's more properly to works with not such amount of inserts but work with instruments, find the most profitable and do the same.
In general when people do that they don't invest to all instrument because risks are high and it's difficult to look after them
It is better to find 4-6 instruments and share a capital between them
That's all for now. And how does this program work?
The program uses dll files they are included of course to launching
There are screenshots they shows how the full version looks like and I showed it in my video
Here are a lot of combinations, weights. To shotern combinations additional weight are normalized and they don't influence anything. The only thing influences is the optimal F parameter
In the free program version
this area is not avaliable (reinvestment) and quantity of combinations more than three. The program doesn't count 3,4,5 combinations
If you want to count more combinations as I did you ought to use the full version
And additional parameters are not available too in the free version. But in most cases that is not needed
you can just work with table and manualy order combinations but it won't be shown.
You can use this program in all places where are any investments which have histories of deals
and it can be used in any simple trading area where are any trading history with a profit parameter and loss parameter to share capital between them
If we want to share a capital between any traders considerating their history, count accounts, put them into the program and the program will do it it's best way
But it's necessary to remember that accounts should be normalized by time
for example when the first instrument makes any deal with any interval and another one makes two deals with the same interval
and the program simply doesn't know it so you should normalize them to the sort if they made simultaneously
In another words 2 deals of the first instrument will be equal to one deal of another instrument
because the program enter into the market with all instruments simultaneously with their history and their parts
It should be understandable about currencies. If we want to count any percents they are already normalized and if we want to count any input values (One trades euro and another one in USD)
we can't use them as input values until it is not normalized to any common currency for example USD.
In addition to that I want to say that the Optimal F parameter changes slowly. It makes counting suitable to count on future.
Of course we can't predict deal results but we can predict investments reliably. That is why this parameter is very useful.
This fact is mathematically proved parameter that it changes slowly and it really works.
And I think that everyone can confidently rely on this parameter in a long term prospect
It can be used in every place where is needed to share your capital between any trading instruments
It can be used in any trading accounts, Forex, Mirror trader. It works everywhere and it relly helps fast to make a dicision, count a parameter and how to share security holdings.
That's all for now. Profit investment project, Bukalov Ilya