Tech Torque – Choosing a Portfolio

Like our other trading systems, we are providing signals for different variations of the Tech Torque strategy. Each portfolio uses the same underlying concepts, with the primary difference being the number of open positions allowed. So which portfolio should you trade?

One way to select a portfolio is by looking at the performance metrics. My personal favorites are Compound Annual Return (CAR), Max Drawdown, and Exposure, although I look at all the others as well, mostly to see how the portfolios differ from each other.

Looking at this page we can see the current portfolio statistics.

Not surprisingly, as the portfolios become less concentrated by holding more positions of smaller size, there’s a clear progression of lower returns and lower risk (drawdowns). This is a very typical result of diversification.

If you want to maximize your returns, then Achernar is probably the portfolio for you. If you prefer to minimize your drawdowns, then Regulus will likely be your choice. And for those that want to split the difference, Altair offers returns that are midway between the other two, with drawdowns that are only marginally higher than Regulus.

It’s also worth considering how each portfolio might fit into your overall trading strategy. One way to do this is by using the Strategy Spreadsheet which is available to members of The Crew.  You may find that your existing trading strategies work better with one of the Tech Torque portfolios than the others.