Ultimate Algorithmic Trading System

be the difference between holding on to some clients and losing them. The same
risk occurs when flattening a fund because of what is perceived to be a ‘‘sizable’’
profit. Many times, a plus 4 percent month turns into a plus 8 percent. There is
never a black-or-white answer to anything dealing with trading. This is why ideas
are converted into diagrams, diagrams into pseudocode, pseudocode into an actual
programming language and then tested, and tested, and tested.
Speaking of testing, let’s go back to PM and test the ideas of trade stoppage once
the portfolio, on an intramonth basis, digs itself into a 4 percent hole, or when the
portfolio achieves a 4 percent profit. Trading will cease until the beginning of the
following month. PM enables this type of testing with just a few keystrokes. Go
back to PM and click on the Manage Portfolio button, then click on Portfolio
Settings, then on Portfolio Stops (Figure 9.19).
The first parameter that needs to be set is the Portfolio Stop Loss. Click on the
dropdown menu and select Portfolio Stop Loss and set the parameters as shown
in Figure 9.20. Set the Loss As Percent to True, Loss Target to 4, and Period
to 1. Click the Set Stop button and the Portfolio Stop Loss will be applied to the
portfolio strategies.
Now let’s set the Portfolio Profit Target by setting Period to 1, PrftAsPercent
to True, and PrftTarget to 4 (Figure 9.21).
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PORTFOLIO ANALYSIS
FIGURE 9.19 Under Portfolio Settings (marked as 1), go to the Portfolio Stops tab (marked
as 2) and set the stop strategy of your choosing. Under the dropdown menu, there is a description of
how the selected strategy will impact your portfolio (marked as 3).
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