Get Trading Signals

You need to purchase Tranquility Trading Crew Platinum Membership to access all these strategies.

For more information on click on one of the following

• The Crew – access to everything
• Big Cap Alpha
• Market Surfer
• Tech Comets
• Volatility Trend Trader

Drawdown days is measured in calendar days not trading days.

This tool is updated quarterly. Download the daily equity data here .

Thoughts

As fun as this tool is to play with and find the ‘perfect’ allocation to meet your goals, remember that this process is also prone to over-fitting. For example, if you allocate your percentages such that you minimize the maximum drawdown, this is likely not going to be true going forward.

Use this tool to learn how adding more strategies can help reach your goals. But don’t get overly focused on the exact percent allocation.

Everyone has their own approach to combining strategies, but here’s one possible way to do it:

1. Begin by allocating 100% to the strategy and variation whose characteristics and performance best match your goals. These performance metrics constitute your baseline.
2. Randomly select a second strategy, and allocate 50% to each strategy.
3. For the second strategy, select each of the different variations in turn, without changing the allocations. See which variation seems to best complement your primary strategy.
4. Now that you have selected a variation for the second strategy, try changing the allocations in 5% or 10% steps, i.e. you could test 10/90, 20/80, 30/70… 80/20, 90/10. Don’t just look for the “best” allocations, but notice how changing the allocations moves the performance metrics in predictable ways.
5. After you select the allocations that you want to use, you can treat the first two strategies as a single “super strategy”, and return to Step 2. The difference is that instead of allocating 50% to the primary strategy, now you can allocate a combined 50% to the first two strategies. For example, if you decided to allocate 70% to StrategyA and 30% to StrategyB, then for the next iteration you would allocate 70% * 50% = 35% to StrategyA and 30% * 50% = 15% to StrategyB for a total combined allocation of 50%. The remaining 50% would be allocated to strategy 3, allowing you to select a variation as described in Step 3.

Using this approach will not provide results for every possible combination of strategy allocations, and as noted above (or below), the “best” historical performance will not necessarily lead to the “best” future performance. However, this does provide a more methodical framework than simply assigning random allocation values to each strategy and variation. And by taking a disciplined approach and recording your results, you will develop a much better understanding of what each strategy contributes to the overall portfolio.

To ask questions about the spreadsheet or anything about it, go to this post.

Disclaimer

The information and analysis on this site is provided for informational purposes only. Nothing herein should be interpreted as personalized investment advice. Under no circumstances does this information represent a recommendation to buy, sell or hold any security. None of the information on this site is guaranteed to be correct, and anything written here should be subject to independent verification. You, and you alone, are solely responsible for any investment decisions you make. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional. My thoughts and opinions will also change from time to time as I learn and accumulate more knowledge.

So do your own homework and take responsibility for your trading.