Rank: Member
Groups: Registered, Registered Users Joined: 11/12/2005(UTC) Posts: 18
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I don't quite get it why the System Tester doesn't take all the signals if you use 100 % of available equity in every trade? If you use for example 20 % it takes them :)
Should it take them all? If I have lost 10 signals in a row, and I only have 50 % of my equity left, why can't I invest that rest at the next signal?
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Rank: Advanced Member
Groups: Registered, Registered Users, Subscribers Joined: 7/25/2005(UTC) Posts: 1,042
Was thanked: 57 time(s) in 54 post(s)
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Finquant
The problem with allowing the EST to attempt to invest 100% of equity is that it usually calculates the number of shares to purchase on the bar prior to the entry (assuming there's a delay applied to the entry signal). If the real entry price (on the actual entry bar) is higher than the price of the setup bar, there is insufficient capital to buy the previously calculated number of shares. As a result the buy is aborted.
There are a number of ways to get around the problem, but understanding the problem is the first step in creating a solution that fits your needs.
One method that works for a number of situations is to apply the signal delay to the Buy Order window formula with a Ref() function instead of using a Strategic Delay or an order opening delay in the simulation. When the "shares calculation" and entry occur on the same bar a rising price does not cause the buy to be aborted on the basis of insufficient capital.
Obviously this is not a "one size fits all" solution, but it gets around the most common cause of entries failing through "insufficient capital".
Roy
MetaStock Tips & Tools
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Rank: Member
Groups: Registered, Registered Users Joined: 11/12/2005(UTC) Posts: 18
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Why didn't I figure it out?! #-o
Thanks! You rock! =D>
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