1 / 114

Insight Trader v18.1

Insight Trader v18.1. Insight Trading Pty Ltd ACN 009 946 932 www.insighttrader.com.au 02 4751 2932. New features implemented in Insight Trader version 18. Disclaimer.

peers
Download Presentation

Insight Trader v18.1

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Insight Trader v18.1 Insight Trading Pty Ltd ACN 009 946 932 www.insighttrader.com.au 02 4751 2932 New features implemented in Insight Trader version 18

  2. Disclaimer • This presentation refers to certain securities and portfolios of securities only to illustrate the philosophy behind certain developments in Insight Trader software • This in no way constitutes a recommendation to buy or sell any of the securities mentioned that may or may not be suitable for your personal circumstances • Past price performance is not necessarily any guide to future price direction • Before investing in any security you should seek the advice of an appropriately licenced financial advisor • Neither Insight Trading Pty Ltd nor any of its officers, servants, agents, independent contractors or otherwise are licenced financial advisors

  3. Warning • The performances, over a very limited time period, of the two portfolios of stocks used in this presentation have influenced the development of new tools in the Insight Trader software that may assist in stock selection • These tools are simplifications of the actual methods used in the Experimental Portfolio and have not themselves been tested in practice • Stock selection is only one component of a whole strategy that ultimately determines portfolio performance where amongst other things management of any holdings is critical • Overall performance of a strategy cannot be properly assessed until it has been demonstrated over at least one but preferably more bull-bear cycles

  4. In creating a presentation on incremental changes to disparate parts of a software package it is difficult to produce a coherent continuous and interesting narrative. Instead such a presentation will of necessity be piecemeal. Nevertheless I will try my best to maintain your interest.

  5. Two main themes mark this upgrade • Two new proprietary indicators Velocity and Behaviour – global throughout the program – that are targeted towards improving your returns • The incorporation of important portfolio information into the charting display In addition we have introduced a large number of other miscellaneous features designed to expand speed up and simplify your analysis.

  6. First let us look at the interface changes There are changes to the 3 toolbars

  7. Four new main toolbar buttons Risk Calculator Arrange charts by Velocity Show Portfolio trades andother info on charts Arrange charts by behaviour

  8. Two new Portfolio toolbar buttons Generate/Update Equity curve Convert Commsec Today file

  9. 3 new Floating Toolbar buttons LRGR Velocity Behaviour

  10. And on the indicator menu “I”

  11. Part I The New Indicators

  12. Why Velocity? Why Behaviour? • Velocity was on the drawing board for several years • The performance of our Experimental Portfolio encouraged us to bring it forward • It has been designed as a simplified and rapid way to emulate the analysis behind the Experimental Portfolio although it is not exactly the same

  13. What are they? • Velocity is a single value measuring the rate of price increase based on the compounding rate of price growth from three different time frames • Behaviour assesses a type of statistical volatility that is not captured by traditional measures such as ATR or Bollinger and acts so that the smoother the price change over time compared with the rate at which it is rising or falling the closer this indicator approaches 100%

  14. Velocity • Velocity is expressed in terms of percent per annum compounding (%pa cpd) and can range from minus 100 %pa cpd to plus several thousand %pa cpd. • If for example a security displayed a Velocity of 100%pa cpd what this means in practical terms is that if it continued to exhibit the same Velocity over two years then at the end of the first year it would have doubled while over two years it would have quadrupled in value.

  15. The Experimental Portfolio In October 2012 we set aside $100,000 to create a new real portfolio (The Experimental Portfolio) to test the performance of a new trading strategy against that used in our existing long standing portfolio (Main Portfolio) This comparison was maintained until the end of March 2014 – a little over 17 months

  16. The Experimental Portfolio This is the portfolio as it stood at 16/3/2014

  17. And these are the relative performances Currently standing at over 70% the cumulative outperformance of the Experimental Portfolioover the 17 months is noteworthy

  18. This was of particular interest to us • And it stimulated us to ask what would be the absolute upper limit of performance that one could possibly expect to achieve in a buy and hold portfolio composed of financially respectable stocks over the same period • With the benefit of complete hindsight we cherry-picked the 12 best performed stocks we could find and notionally invested in a hypothetical portfolio, on 2 June 2012, $8.3K in each for a total of $100K

  19. The Hindsight Portfolio This is the Hindsight portfolio as it stood as of 16/3/2014

  20. And these are 2 portfolios compared with the All Ords accumulation index So even the Experimental is only 30% of the way to achieving the “theoretical maximum” return

  21. So what special attributes characterise the 12 Hindsight Stocks • They are financially strong (Stock Doctor rated) • 6 are Star Stocks (almost a quarter of all stars) • 3 are rated Strong and 1 Satisfactory • 2 are Early Warning • They all have high rates of price growth • Their growth is smooth and steady without wild erratic swings (ie low swing volatility) There are a total of only 26 star stocks in the Stock Doctor universe and we unknowingly chose a quarter of them for this portfolio

  22. How do we find such stocks For: • Financial Health – Can use Stock Doctor or insteadscan with Insight Trader with appropriate fundamental criteria • Price Growth Rate – Can use Velocity • Smooth and steady growth – Can use Behaviour

  23. Let us look at one of the stocks CAJ has spent over a year with a Velocity of between 100-700% pa compoundingThe Behaviour Index has been above 90% for most of that time Velocity = 100%pa cpd Behaviour = 80%

  24. Most of the 12 Hindsight Stocks • Have spent around 12 months growing with a Velocity between 100-300% pa compounding • Simultaneously they have exhibited values of Behaviour Index of between 80-100% for a similar period

  25. Velocity and Behaviour values are also immediately accessible on the F12 databox

  26. Filter reports are ordered on Velocity so that the fastest rising stocks are at the top of the list and seen first

  27. And a column for Ranking Number has been introduced into the reference lists to allow the position in a list to be assessed for any particular stock

  28. Filter list is ordered on Velocity Rankingcolumn Velocity Behaviour

  29. Velocity & Behaviour are also implemented as Systems Functions

  30. Part II Integration of portfolio data into the charting function

  31. Important Portfolio data is now incorporated into the chartsBut we need to first look at the changes in the Portfolio Manager itself

  32. Portfolio changes • Risk calculator has been extended to incorporate: • New risk management scheme for existing units • Risk posed by illiquid stocks • Limit posed by remaining available cash • Can toggle a stock’s daily change between % or $ • Daily change in whole portfolio displayed at top • The portfolio summary has four new columns • (i) Velocity (ii) Behaviour • (iii) % of Daily t’over(iv) max addnl purchase possible

  33. Changes to Portfolio Summary Daily change in pfolio How much more can I buy Percent of daily turnover Behaviour Velocity Toggle button to display between daily % change / $ change

  34. New Scheme for Risk Management Three methods are now available that differ in the way they treat the contribution to the total risk arising from existing units. These risk contributions are as follows: Method: • Colin Nicholson’s scheme as outlined in his booksRisk=current price – sell stop price • Colin Nicholson’s scheme predating his booksRisk=MAXIMUM(averagepricepaid – stopprice,0) • An amalgamation of 1 and 2Risk=MAXIMUM(averagepricepaid,currentprice) - stopprice

  35. New Scheme for Risk Management • In addition we assign a risk to the total portfolio from all possible positions, say 16% • This is then multiplied by the % parcel size, say 6% • To give a risk for that 6% parcel of 6% x 16%=0.96% This scales the risk according to parcel size

  36. Method 3 addresses several issues • In certain scenarios in Method 1 you could lose over twice as much as you had bargained on • For certain scenarios using Method 1 in order to get your full complement in successive purchases your stop had to move closer and closer to the buy price • In Method 2 if the average price paid for existing units is below the stop the maximum allowable purchase remains fixed no matter how many extra parcels are purchased until the average price paid rises above the stop

  37. This is the new Risk Calculator Set total risk from all positions Set liquidity risk as % of turnover If box ticked then position limited by: Risk to total capital Total maximum position size Average daily turnover Remaining cash available

  38. Now we are in a position to see how this portfolio information is integrated into the charting function

  39. Load a Portfolio, chart a stock and then toggle this toolbar button

  40. Portfolio data displays on charts Toggle the button again and …….

  41. Portfolio data is removed Toggle the button again and …….

  42. Portfolio data displays on charts Average buy pricefor all open positions How much do I currently own Buy flag How much capital profit have I made How much more can I buy Buy flags Sell flags

  43. Part III Miscellaneous enhancements

  44. Miscellaneous 1 • Soft stop implemented • AutoEnvelope • Ctrl F2 accesses FT.COM fundamentals website • Extended fundamental information can be imported from other programs and websites for display, scanning and analysis • Run profitability tests in batches for a number of systems for list of securities with single click • Get data button

  45. Soft Stop

  46. Soft Stop • A soft stop has been implemented by placing a slash after the figure for the hard stop and entering the value of the soft stop optionally followed by an “h” “l” or “c”. The letter will override the global setting for whether stops activate on the high low or close eg:32/43c • The other two stops can similarly be overridden

  47. Soft Stop on High Low or Close

  48. Alex Elder’s AutoEnvelope

  49. AutoEnvelope • You can set the Moving Average Envelope function to operate automatically to completely enclose at least say 95% of the bars • You can alter the number specifying the maximum percentages of the bars say 5% that can extend out of the envelope by calling up the 'Default Parameters for Indicators' dialog box and entering say '5' in the 'Band' field for 'MA Envelope'. This will ensure that no more than 5% of bars extend out of the envelope

  50. AutoEnvelope The envelope will automatically adjust to just enclose say 95% of the bars displayed

More Related