The Efficient Factor
The VectorVest RealTime Derby had become very first highlighted found at the New York Traders Expo in February 2009. This possesses happen to be an remarkable and fascinating application ever since. Way more than that, it seems to have proved to be an extraordinary base of information and facts.
In a day-to-day basis, it monitors and indicates the performance of 185 10-stock portfolios tick-by-tick from the point in time the sector starts up until it shuts at 4:00 PM. With the Derby, there exists absolutely no trouble finding exactly what is really going on in the market place and today was no distinct. The important indexes started out sharply lower, however the Derby seemed to be exhibiting Bullish strategies as the most significant gainers in earlier trading stocks.
The leading Strategy was "Best Performers > $1.00." I clicked on the performance bar to see which stocks were in the portfolio and saw that Power-One, PWER, had gapped up about 20% at the open and it wasn't pulling back. I took a look at its one-year graph and saw that this stock was trading at about $1.30 per share last September and it's now over $12. Did I miss a good stock here?
Sure I missed the early moves, but the stock still looks interesting to me. It has gapped higher on high volume several times since last September and certainly looks like it's going higher. I bought some.
Then I opened the Tote Board. This tool is my favorite part of the Derby. It shows the cumulative performance of all the Strategies over any time period since August 18, 2009. The calendar for selecting the beginning and end dates of the test periods was updated recently to show the C/Up and C/Dn dates given by our Market Timing System. For example, the best performing Strategy for the Upwave which started on 02/19/10 and ended on 05/07/10 was none other than "El Cheapo Cheapos," with a Total Gain of 51.95%.
Are you kidding me? What kind of record does it have? Well along with its terrific gain, it had 62% Winning Days, 42% Winning Trades, a Maximum Drawdown of 27.43% and an Efficiency of 18.92. An Efficiency of 18.92, what's that all about? It's something that VectorVest calculates which combines the Percent Winning Days, the Percent Winning Trades and Maximum Drawdown Percentage into a single item called the Efficiency Factor.
Is 18.92 any good? Well it's not bad, but the next biggest gainer is "Thornton's Thunder," which had a Total Gain of 49.23% and has an Efficiency of 24.84. From what I can see, Thornton's Thunder had the best combination of Total Gain Percent and Efficiency during that particular up wave.
Interesting. What Strategy had the best Efficiency over that time period? "Great Stocks," with an Efficiency Factor of 32.06, but it had a Total Gain of only 3.96%. So it seems that there's a trade-off between Total Gain and Efficiency.
Of course there is, we've seen it over and over again. The most effective Strategies, those that give the highest gains, are those which return volatile, low-priced stocks and the most efficient Strategies, those that produce relatively modest gains, are those which return less volatile, higher-priced stocks. That's no surprise, but is it possible to use the RealTime Derby to find Strategies that will be both effective and efficient? Yes, I believe so. Next week I'll report some surprising things I discovered by using the Tote Board and The Efficiency Factor.
EFFICIENT PERFORMERS
The Price of the VectorVest Composite hit a low point on July 6th; then shot higher for several days. It was time to go long. When would you have gone long and what Strategy would you have chosen? Let's see what Mr. Jerry D'Ambrosio did to make his selections. Visit the VectorVest University to see this week's "Strategy of the Week" presentation: "Efficient Performers."
MANAGING THE MONEY MAKER
Last week, we illustrated three trades on selling Covered Calls which were based on using the Options Rate of Return tool and the "Optionable 2x4s" Strategy. Two of the trades were profitable, one was not. None of the trades were managed. This week we will illustrate how all of these trades would have been profitable, had we used the portfolio management guidelines given in the PayDay Portfolio Report.
In a day-to-day basis, it monitors and indicates the performance of 185 10-stock portfolios tick-by-tick from the point in time the sector starts up until it shuts at 4:00 PM. With the Derby, there exists absolutely no trouble finding exactly what is really going on in the market place and today was no distinct. The important indexes started out sharply lower, however the Derby seemed to be exhibiting Bullish strategies as the most significant gainers in earlier trading stocks.
The leading Strategy was "Best Performers > $1.00." I clicked on the performance bar to see which stocks were in the portfolio and saw that Power-One, PWER, had gapped up about 20% at the open and it wasn't pulling back. I took a look at its one-year graph and saw that this stock was trading at about $1.30 per share last September and it's now over $12. Did I miss a good stock here?
Sure I missed the early moves, but the stock still looks interesting to me. It has gapped higher on high volume several times since last September and certainly looks like it's going higher. I bought some.
Then I opened the Tote Board. This tool is my favorite part of the Derby. It shows the cumulative performance of all the Strategies over any time period since August 18, 2009. The calendar for selecting the beginning and end dates of the test periods was updated recently to show the C/Up and C/Dn dates given by our Market Timing System. For example, the best performing Strategy for the Upwave which started on 02/19/10 and ended on 05/07/10 was none other than "El Cheapo Cheapos," with a Total Gain of 51.95%.
Are you kidding me? What kind of record does it have? Well along with its terrific gain, it had 62% Winning Days, 42% Winning Trades, a Maximum Drawdown of 27.43% and an Efficiency of 18.92. An Efficiency of 18.92, what's that all about? It's something that VectorVest calculates which combines the Percent Winning Days, the Percent Winning Trades and Maximum Drawdown Percentage into a single item called the Efficiency Factor.
Is 18.92 any good? Well it's not bad, but the next biggest gainer is "Thornton's Thunder," which had a Total Gain of 49.23% and has an Efficiency of 24.84. From what I can see, Thornton's Thunder had the best combination of Total Gain Percent and Efficiency during that particular up wave.
Interesting. What Strategy had the best Efficiency over that time period? "Great Stocks," with an Efficiency Factor of 32.06, but it had a Total Gain of only 3.96%. So it seems that there's a trade-off between Total Gain and Efficiency.
Of course there is, we've seen it over and over again. The most effective Strategies, those that give the highest gains, are those which return volatile, low-priced stocks and the most efficient Strategies, those that produce relatively modest gains, are those which return less volatile, higher-priced stocks. That's no surprise, but is it possible to use the RealTime Derby to find Strategies that will be both effective and efficient? Yes, I believe so. Next week I'll report some surprising things I discovered by using the Tote Board and The Efficiency Factor.
EFFICIENT PERFORMERS
The Price of the VectorVest Composite hit a low point on July 6th; then shot higher for several days. It was time to go long. When would you have gone long and what Strategy would you have chosen? Let's see what Mr. Jerry D'Ambrosio did to make his selections. Visit the VectorVest University to see this week's "Strategy of the Week" presentation: "Efficient Performers."
MANAGING THE MONEY MAKER
Last week, we illustrated three trades on selling Covered Calls which were based on using the Options Rate of Return tool and the "Optionable 2x4s" Strategy. Two of the trades were profitable, one was not. None of the trades were managed. This week we will illustrate how all of these trades would have been profitable, had we used the portfolio management guidelines given in the PayDay Portfolio Report.