15.-Sistemas inerciales de ETF's sobre sectores

More

than trying to make the

system evolve on its own, to

change its parameters by

itself, to make it intelligent, I'm going to

try to

basically apply

all the systems at once for systems that win a

lot,

but well, in the end it's

a hodgepodge of the system that I have

at the bottom of it,

and so far we've been at it for three years, so far it's

gone well, there's no

love involved,

much less, but it shows that you have

consistency to apply your

systems, winning systems,

etc.,

in systems to see if it's going to make you

money or not, you know what

the future holds,

but well, we'll see

the method later. Here I'm going to try

a little bit of what I do, they are very

simple things, we don't get into a lot of

math, we're simply going to advance

combinations of parameters and

see how the system defends itself with

different scenarios,

and then we'll see a little bit of the curve, and if

the curve, well, if it doesn't give us many

peaks, well, in the robust system,

normally

when it has good neighbors,

each one

a profit, for more stable,

that's what you have

applied to the stock market, you have a lot of...

later, if you want to know something, the

book 'The Biography' I can say

there's a lot written about it, there's even

a thesis in English, but well, you have to

understand.

So basically, what I

want to explain is a system

because, well, on

previous occasions I applied three systems, and

well, I saw that people got a little

scattered with so many

systems. So, in the end, this year I said,

well, instead of explaining three or four, I'm

going to explain one and make sure it's well understood.

But don't think that I only use this one; it's

not

one of my systems out of the seven I

have,

and it's not the one that earns the most

either. Many times

people ask me, "Why do you have

seven systems? There must be one that earns

much more than the rest," and "Why don't you just use one?"

Sometimes it's not interesting at all,

or how do you earn? How do you make that profit? The

volatility that the price curve returns

is much better; it ends up a little

lower,

returning a much lower volatility, a

much lower debt. So, I'm going to talk about that, and

how do you achieve that? One of the ways

to achieve that is by using, instead of

one system, seven. It's

very difficult, but well, if you can use

one, great.

So, the one I'm going to

present to you today is called Upward inertia—

I didn't invent this, it's the

result of several

ranking books. We'll see what that is later,

but basically, what's done is to

evaluate the strength of an asset

with respect to the volatility it

develops. By

strength of an asset, I mean,

for example, how much it has risen.

A basic parameter is the rock. We'll

add a little bit of the

top 60 exchange rate

per exchange house. This is how much the

value has increased over

a certain period. It's

very simple: for the rock of the IBEX

in six months, what it has risen or

fallen in six months. That's it.

Simply put, for example, the rock has

risen 5% in six months. So,

this is the beginning of what can be

considered strength compared to what it has

risen or fallen in a certain number

of months.

For volatility, the

way to interpret it,

as I do, is by taking the earth.

How is it calculated? Okay,

periods.

And

this basically means

a time window

when

an asset has moved. The IBEX, when it has moved in an

arc of 6 in 14 months, well, there isn't a

20 percent variation

in this case, the volatility could be

20. So, if I divide what

has gone up by what has

developed, I'll have

a kind of

factor,

I call it the inert Mayan artist.

Once I know how to calculate this, the

next thing is easy, in quotes, it's

choosing a bag, a group of assets,

for example, well, we'll see later,

but I, for example, EFE,

ready, according to the initiative they have, that is,

according to what they have gone up in the

volatility they have developed.

Someone might think

[Music]

if they go up a lot they're going to develop more

volatility because the range

will be greater.

Well, yes, but no, because it's not the same.

Volatility

has gone up the same, however, they have gone

up in different ways,

much more volatility has developed,

therefore it will have less upward inertia. It

could be the European utilities sector, it could be the

American healthcare sector,

whatever is on the list. So the

trick of this system is seeing

how I'm going to allocate the strength, the

volatility. I always use the same,

but the trick is a little bit in knowing

what period of strength it can Choosing

which assets to include in the list is what

will determine the outcome of

our system.

Obviously, it's not the same to include

homogeneous assets (

sectors only), indices

only,

and heterogeneous assets (i.e.,

here I have all the bonds, three

commodities, five indices). It's not the same, and the

result isn't the same. Okay, that's why

we're going to have, let's say, two

variables to evaluate:

strength and volatility.

Often, this drag

is the market,

a systematic risk, which is

market risk. Very well,

we select the stocks; if everything falls,

everything falls. Regarding

the programming, I've

put this here; it's

very simple for me. It also comes from

the book "The Quality Trading System" by

Howard Branding. It's been

tweaked, has some

minor adjustments, and it's very simple.

What you have to keep

in mind is that there are

several lines here;

there are others. Optimize

with two parameters; in this case, it's m and n,

which will be two.

Now we'll focus a little on...

very well, I know the theory. How to

calculate how to

choose one asset over

another

when I talk to my fellow

analysts there about PPM and all this,

but since you're involved in the

stock market,

the bears have gone up a lot, well,

in the end I do it

in the systems of the system, and at the moment

specifically for defensive sectors, like

real estate, it's been going in

and out well, but you're

not going to see this system heavily

invested in

banking, but why not? Because it's very

clever, it does

n't like banks.

What it does is evaluate, of

course, if the banks have gone down, the role

this will have will be negative.

How is it calculated? Look,

this is a sum with different

weightings. Here you have a road 1

that's up there,

x periods,

2

in this case it's going to be the same asset,

obviously,

the periods we'll put y,

and then to this we add a

weighting, in this case by 0-4.

So

we're going to differentiate between the

longer-term exchange rate and the

shorter-term exchange rate and we

assign weights, 0.40 points, it only makes

0.6, you

can imagine what weight volatility will have.

The volatility here, simply set

to 14 closings, is a value

designated as 14.

As I mentioned before,

the periods are

14,

and why is it 14 and not 6?

It's running different simulations:

14, 6, 12. It

's not a

relevant parameter, so to speak,

but you have to consider it

because, as I said, it's not the same to rise

more decisively as to not

develop with greater activity.

In this case, it's by 0-4.

Then, what's

done is the calculation of the

inertia. It's

the sum of

what rises at the cutoff in the long

term. If they aren't

equal, in reality,

asking the system how much it has

risen in 10 months, I'm going to be

5, 10,

and I divide it by three.

In this case, the volatility

is initially set here, and then what it does is

a score ranking

in which shorts could be allowed. I

don't use shorts; I prefer to use... Look at

this effect: something happens, and there are

seven inverses. So

why would I allow

short trading and trigger an inverse ATS? It goes up

when it goes down, just like it's

simulating.

Obviously, I don't allow short selling, and

we could even do it.

What I would do is start from the bottom,

only from the bottom,

a list of 10 assets,

and operate the system, but I don't

recommend it. It's better to rank everything from the

top,

including the

inverses, and see when they come out.

When the time comes,

if the stock market falls a lot in the inverse of the

Eurostoxx, it will come out here.

This system won't buy at the bottom

or sell at the top,

keep that in mind, because it works based on volatility

and stability.

For this system to sell or

take you out, it

has to be in negative territory;

the asset has to have already started to fall to exit. Okay, so it's

not a fast system, but it's the

system that earns more than, of course,

buying, holding, and then seeing the

results.

But it's very simple; the

system doesn't have more to it than this. The

trick is to clearly define which asset to put in

here

and what parameters to use.

Five-month window, which might be

this state.

Well, seen this, very easy.

Well, here, in fact, as a

comment, I put the different

parameters that can be used in

different functions. Here I've

put five lists that you can see, which say 3, 4, 4, 2, 12, 8, 8, and

12. These are different

groups of parameters that

are profitable and can be used. That's why

I said, "Clearly, this is something. The

result is very similar." Don't think

that using a parameter of 6-10 is going to

be very different from using 8-10, for

example.

I'm referring to 6-10,

and this one in 10 represents

its life in six months and what it

has risen in ten months. I add that to what it has

experienced due to its volatility. The expense

consists of,

when I say "rock" or six-

day parameters, that's what I mean

because this is always 14. The volatility... well, now I

have a way to evaluate

assets. I insist, I don't get into stocks

in daily or even minute timeframes,

but it can be done. Of

course, you'll have

more trades than doing it

monthly.

As a manager,

what kind of stocks do you choose? Because it's not the

same to choose very volatile stocks or those

with little trading, which will give you

larger express trades, as it is to choose the big ones. Make

a list of 20. 30 big ones and let's see what happens,

probably better with the big ones,

but mainly because of what

you do

and then the real market, because

then the market starts eating

from 03, 04 because they are small but very

volatile, which changes the story.

Yes, yes,

all monthly, you

could do it because keep in mind that in the

end, if you ask the value how much it has

risen in x programmable months, you

are also asking it on the

scale in months,

but then I ask you how much it has

developed in six weeks, it doesn't make

much sense, okay? It's better that we don't

change the scale, okay? All monthly,

all monthly, if they were minutes, minutes

in terms of its life,

and what good utility it has developed. Let's

see when I tell you that this is 14,

also the next ones

a little bit, the proportionality

[Music]

don't put more than

16 bars of archive bars, okay? I'm not

saying months,

between 8 and 16 bars is where

the volatility of the others is, I mean, it's

not critical when selecting

assets,

more critical is this because I have set the

weighting of the rocks to 0,

so you

develop now, active controls They

rise the same, of course,

the critical factor becomes volatility,

obviously,

but keep in mind that in the end the

window is the same for both assets:

14, 12, 16. It's a bit... it's going to be

good,

yes, yes, of course. Well, let's

see, for the moment, I understand that ultimately,

taking an indicator,

effectively, for the moment, and saying, well,

when it's overbought or oversold,

then I take it,

perfect,

except perfect, it can take you away from

many things,

but the key is that the indicators

you're going to choose to make that ranking, you

can indeed gain strength here,

the strength that comes from the rock rather than from

a contraction, with,

and of course, here, indeed, what

you are can be strong simply

because the market has risen, as everything

rises, well, you're going to have many

assets that are strong, I'll keep the strongest ones,

but if the answer is affirmative, in the

end it's still just a system for the

moment,

and here we're not inventing anything, you have to

interpret the wheel, the

simple rate of change, the slope of a

line, the derivative is what rises as a

function of time,

the tri-reims,

which would be

the average, that's why it's

the atm, that is, what

the price has oscillated.

From the close to the high, in the

case of an upward trend, from the

close to the low, those are the

three different points. You take the average of those,

and then it forms the trend line. It

ceases to be volatility.

14 of the

average, and that's it.

Okay, now comes the other

part of it. I understand a little how

this works

for now,

and of course, going through

deprivations, the range is very broad. You

have to choose,

and this is where

the questions that many

people ask come in. Well, why is it the other type? And

why a list of sectors? And again,

analysts,

we can make mixed lists,

which are heterogeneous lists in which

I include bonds. Method so that these are all... there are

bonds and avant-garde

real estate, there are small caps, there are

Asian stocks, there are Nasdaq,

and all short positions are also bearish.

Bonds, of

course, the typical: why these 123

13, why these 13 and not the other 16?

The answer is, here you have to take the trend line

until you consider that it has covered

a more or less broad range of a

spectrum of... A sufficient market, of

course, Chinese stocks aren't included. You can

add an FX, and well, if FX is included,

then, of course, as you

add more and more, it

loses a bit of its meaning. They don't really know

what you have included anymore.

Sometimes I've even seen lists—there are

people who make lists and such—with repeated stocks

with different roots, but I insist, in the

end, they have the same companies, two, etc., they

have the same main company, so you

have to try not to repeat. If

you want to make lists,

I don't recommend it because the

result tends to be a

bit more volatile. It doesn't quite

convince me, but well, the

result is good. Otherwise, use

lists

with assets. For example, if you put two

sectors, all sectors, or everything in

that country, the Eurozone, all of them,

because then there's no doubt about the

assets you can include. That is,

if you're talking about sectors, then include

all 16 or 19 that exist in Europe, or

the 12 supersectors that exist in the US. That's it,

nobody can tell you why you

included another destination, or not all

the supersectors are there. I

recommend that it be more

homogeneous because then... There's no doubt

different assets, well, the

result can vary

[Music] It could be

that just when you're looking at the

Chinese stock, and if China goes up, then it

works very well. If it's just when it goes

down, then

the dispersion of the result is higher.

This type of thing,

so to speak,

but well, this list of EDFs generates

this result.

In this case, here, 13

parameters that we have chosen

coincide, that is to say, they are what the

question is. Is the system good? From this

list,

at the end of March they are going to open because the

system has a monthly operation, once a

month, it ends at the end of

the month, and this

system says, "Hey, which one do I have to

have?" Well, which one

can you say? Which one? It

could be that I had the two best, or

the three best, or the four best. And

then another question: why

take two and not six?

All this in the end, of course, if you take all of them,

the result you will get will

be lower in exchange for

less volatility. Well, you

also have to get a

midpoint.

More assets

gives me an advantage in terms of debt.

Well, what I study is that putting more

than two assets simultaneously...

You can include up to 4. There are simulations where

4 works well for me. Simultaneous selection

refers to selecting the 4 above,

those that develop the most upward momentum. I'm

not saying you should select two; two is

enough.

One falls short; two are very good. 34.

More than 4, we're not

talking about simultaneous assets. There are

those you select

in the system. It says, "Hey, let's suppose you

select 2."

The question it asks is, "

Of all these assets, are these the two?"

The party starts. They have, that is,

if the parameters are 13, 13, 13, 13,

14, to

calculate the 13-month rock,

how much has asset number 1 risen in 13 months?

6%. It

coincides in 13 months, so it's going to be 66.

12. What a good trend it has developed. Join,

EFE. When there are 13 sectoral assets out of 3,

in general, which include many things,

volatility is usually low, so it's

better to have

parties,

but we won't go any further.

And maternity,

and well, you're left with 5, for example,

between 5 and

4, well,

that asset. It will have,

and so with all

this, what it does, what it tries to do, is

be in the assets

that rise the most,

and well, but it's an asset, a

guideline, clearly,

profitable or not,

to the curve, as it is,

I would say it's profitable.

This starts at 220,000, don't tell me

why, once it

ends at 832,000 with commissions taken

into account

and without dividends added here, the etc.

were also dividends,

okay,

for approximately it's an 8 annually, it

seems like seven and a half now, and it's around the

commission level you put on it,

etc.,

and the currency effect, red,

this is in dollars, here it's not taking

into account, you'll also have to take into

account

your currency, the things that aren't counted,

but

now it has benefited us because the dollar,

as it's rising, well,

everything that trades assets in

dollars, obtain an additional extra profit,

let's say futures or elements, and

well, you know

with leverage, that in that case,

when that leverage is, well, you don't have

dollars

investing, but well, this is

profitable, so

a priori

the system made a

12 or 13, it

says this to make a first

approximation A first impression

of that curve is that it's good. Sometimes

you think something has been done wrong because this can't

be true.

A lot of desire, more than buying and

holding. Well,

without doing much of that,

back, touching a little, maybe

because this isn't optimized. Back to

13, 13,

wait, set the 8, 12, 8, 10.

One thing, well, I'll say that

later. Then

parameters, okay. The next step: I

have a list that works for me. I'm going

to make another list.

This list

in European sectors, these are the Lyxor ones. Be

careful here because someone

rightly asked me, "Hey, why use

leaks?" or "If not, use iShares, which

have more trading?" Well, for sure,

one thing:

LICs are the dividend that is distributed, they are added

to the price.

Here there are sectors that give a 5 or 6 percent

dividend. If that is being subtracted

from the chart, the role you are going to get from

that sector is going to be very low, but it is going to

be a weakness. Be

careful

because in reality, in the sector that

is paying out

every year,

that is something that very few people take

into account, but when making

systems The moment you

add

an asset that pays a high dividend, be

careful because if you subtract that asset

from the chart,

then of

course it gains strength. If that

month it has to pay a dividend and you

subtract 1000%, what happens? It will

look weak, but it's not weak if it's

paying. That's why

we use smooth stocks, which

have less volatility, but

in this case, you add the dividend

to the chart. Okay, they

deceive us, but be careful. One thing is, because

then—and this is the funny part—

if I evaluate the system with smooth stocks,

but then maybe I buy the

Sixers

because they have the quality, not because they

have more trading, but because they

interest me more because the spread is

0.3, like in some Sixers, 10s, and even

similar ones. The annual fee is also

much lower, so it can happen

that The system is being evaluated with

Lyxor, but because of the characteristic I

mentioned, because it adds the dividend. But

then, well, folks,

this month the

Food and Beverage stock is the one that has performed best

this month,

and the Utility stock, which is Iberdrola here,

has two signals. We execute them with

Sixers, for example,

which guarantees we're in the

sectors that have performed best. And

also, one thing: of course, then you

think about whether it's good because it works.

You say, well, this has to make

some sense. It does. It

turns out that

sectors are very cyclical, very

seasonal,

even in the economic cycle. You know

how it works?

Some sectors start rising, then they

go hand in hand, then

others rise, etc.

This system works like that,

because it tries to be in the sectors

that take over.

So it rotates, it does

rotational trading.

And in this case, regarding sectors, that's why

I recommend them,

not because they earn more, but because

the trading it's

doing makes sense.

And then we can make the mixes we

want, and although It might not make sense, they can still

work, but

well, this one wins with these parameters, with

455,000 here, which is about

six and a half plus

dividends—of course, what's happening here is that the

dividend, as I've already told you, can be

4 or 5 percent, so we don't get confused.

Since it only earns

six and a half, then I'm not interested.

Sure, the sum of four percentage points,

three and a half, four, it's already at 10. It

turns out it earns more than the

other one, so these

are details that matter

because you look at this graph and it makes you think

less. I'm not interested in the fact

that the dividend sum isn't here, and

we're talking about sectors that give from 33.5

to 5.5, six. The

banking sector even gave more,

specifically, okay,

here it's 20. In

fact, this system has been around since

2009, it

also earns less because it has less

time. Back then, there were

LICs that weren't

yet created for the market, so it was

complicated to evaluate a system, averages, so to

speak.

So we could obtain data

here that's a bit fictitious, so to speak,

from 2009, and that's why. We

have the system, the market, and it's

phenomenal. It's practically at its peak with

a new stock. I

want

20 to find its peaks upon entry, and it

performs better than the market. But you can

see that

clearly. It depends a bit; there are

periods when it does develop

more volatility because it also depends

on which sectors you have, or if it happens to

enter when it has already risen a lot and it

enters here, well, then yes, it

makes you lose. Yes, you can experience more

volatility. But well, in theory,

sectors are usually, by definition,

more volatile than indices.

But if you do it this way,

I observe that they are more volatile, meaning that

even if you're using

indices, you can create

groups of sectors,

and that's

much better.

But look, this is trading once a

month; it

sounds very good. Then, of course,

the day we have to trade arrives,

and I don't get there until five o'clock.

But well, it's

very good. If I had to

recommend it, well, we'll see more.

This is certainly one of the ones I would have.

This one is

worth the same with American sectors; in

this case, they are super American sectors.

In 12, and the curve in this case, well, they

are different parameters, but still,

1010 has been more or less

similar.

We also see how it has its

losing streaks; in fact, it recently had one,

but it also makes money. It's

around seven and a bit annually, plus

dividends. In this case, the

US dividend is between 1 and 2%, which gives you

net income here. So, I'm

not interested in that.

Sometimes, with a system that works

for free markets, it has to

work for Aldáz, for

Solán, and of course, the S&P 500 and the

Nasdaq.

When I tell people, I hope they

say, "Hey,

let's see, 7

in one [unclear] has to work in everything

else." And it's more or less the same, okay? And

if it doesn't work in everything else, something's wrong, something's going on. Not a lot of

money, probably in the

future. And this is what I want to see

when I develop systems, and well, make

different lists that are more or less

homogeneous, that have similar assets,

sectors.

For a group of sectors, it has to

work. The strange thing would be if it didn't

work,

okay? That

's important. Regarding putting things

immersed, I was commenting on

the comparison of parameters, which should

always be done, but don't get too

obsessed with it. While there

are systems that work in very

diverse areas,

for example, here in this case, I like it a

lot because it's a way of... hey,

since it works with a few,

obviously much more air passes through

its sectors. It

deserves the 12 from before,

and something seems to have been done. Well,

a list has been made

based on the most traded, etc. We

haven't dedicated much time to it, okay?

Your locations...

this result has a higher degree,

35, but earns a million, which will be

around

1.10 annually

plus dividends. I insist, this would be the

same, adding another one and a half of

dividends, okay?

Buying on the

first day of the month

and evaluating the next day, the

first day of the following month,

which are the two assets that have a higher

role, a higher area? I insist, this is

done every month,

and if for whatever reason you can't trade on the

first business day, the 1st being a

business day, then on the 2nd you have to

make the change. Assuming that it

seems a bit random,

sometimes you see that it also depends a bit

on the list. Sometimes it comes out on the 6th, sometimes the 7th,

other times it's the 14th. I'm

not convinced, it sounds more like

a random bias than anything else. Okay, so,

taking the 1st more or less, you see

that the result is good

for whatever reason. I can't buy on the 1st, so

for whatever reason it has to be the 4th,

but that wouldn't be the end of the world. We'd have to

evaluate it. It seems

to me that it's a

declaration,

because I don't get the same result

on the different lists. Sometimes it's the 4th, sometimes the

14th, sometimes the 2nd.

So, to me, that sounds

random. I don't

have... well, of the six lists I

have, it turns out that four of them do

coincide on a day, and if there is one, you can have a

component, since maybe it's

more interesting to buy on the 5th than the

1st.

But I haven't seen, from what I've

seen or done

checking, I haven't seen that there's a

particular day that's better.

If you're referring to buying, for example,

instead of every month, every week or every two

weeks, and you'll see what's available, but it's

also done. What happens is that

the bonus it has is that in the The moment

you start changing assets a lot,

the cost

of those tasks, those roles, so to speak,

those changes, becomes very high, and

then you're eating into a lot of profit. I'm

not saying you should do the evaluation

every month, every three

weeks, every two weeks. Of

course, the cost

is mainly in commissions, and I haven't

seen what's

in return for paying that cost, because then

all this obviously has repercussions.

The

system has to be involved,

which means you're going to pay more in

commissions. And I also haven't seen any benefit for

operating it for more than

8 or 9 months, easily,

some even years, like

the health sector, the XLV. So, how can you

evaluate it more? It's not going to make the

changes

worthwhile because it keeps coming up. Well, the very nature of the

system discreetly says that it's not

interesting to do that

because the cycle in which you have to

maintain a sector is very

clear. If you tell me no, but if

our sectors are already doing actions, then maybe

we're changing arguments,

and I can't tell you anymore because I haven't gotten that involved

in the issue anymore,

because it's a guerrilla war.

Regarding the list of 50, you do

n't really know if it's random or a

pattern or not. It's that

in the truck, and I haven't

mentioned it, the inertia perhaps has to be

positive. Even if

everything negative comes down,

sometimes you go up, etc., so you're going to

have some up here even if

everything else is going down. That's why in some of these

lists, yes, what method of inverses, if

the market is bearish and has been going down for a year,

today you can be out, fantastic.

If you're out of everything, they call you

the king of the ports. Obviously, you don't

lose, your colleagues lose,

but without missing out,

yes, it can be inverses, and then there will

always be some. It's

a very good question because I

hadn't said that. Indeed, you

take the one that has the highest price, but

always as long as it's positive. Inaction is

negative, so there's nothing to be done; it's

active, it's weak,

well, it's

technically due to this type of stock that you'll have to

compare it with something, okay?

Because I would have only left creative stocks that

go up, those are the ones I usually

see. I

always try to make sure they're

parameters between 6 and 12. What happens is that I wo

n't have done All 10 days and that's it. Yes, well,

look, basically, this is why it's

curious because, indeed, one

of the parameters asks you to be low, it

really is low, 518 for example. Okay, well, it's

set like that because obviously it

gains a little more,

but it shouldn't be a failure, to

see a very big difference, because what we

're looking for in the end is what I was telling you, that it be

strong, that in the end, not

a very high result, and the rest are

peaks.

I have children like this, I'm not interested in

peaks of parameters, for example, this

could be

i6,

I'm interested in a more stable result,

but a little bit like that. So, well, that's why

you see differences

in the parameters, because, well, I

also tried to adapt each one a little,

but well, I could have set 10 days for

all of them and, of course, obviously, I wouldn't have

gained a million, I would

n't have gained 9 percent, areas

in the seven and a half, another, probably

all the testing is done, which is

well,

and it shouldn't be like that, you shouldn't

get a variation, a slight

variation of parameters, it shouldn't, that's why

the peaks

at the moment when you have

very high peaks and it You change a little bit and

work hard,

that's about optimization in the book,

and of course, in the end,

you have to start from certain parameters,

for example, those 512. Obviously, if

you put 6, 12, 6, 13, 7, 11,

you have to gain something

close to that; you can't go down 50%,

for example.

It's been tested and it doesn't go down that much, of course, in terms of

variations of 20% or something like that. Of course,

if instead of 5, 12, you put in a 3,

16, where you

reduce the first one to 50% and the

other to 40%, then you

can have a

much larger variation. Of course, I'm

talking about the end, what I show, the

same commenters, and if you change one, all of them up

or down, you can't

have a variation of more than 20 or 25%.

If you're not over-optimized, there's

something strange there, or well, surely you're

going to apply it and after a while you're not

going to get that result. The

consequence is

already a bit of a reversal of the

same thing;

in this case, they

are indices.

This is something new,

and doing this year,

and the list is birds, IBEX-35, S The P500,

the 30 Euro Stoxx Down Jones, and the CAC-40 are

more than 100. There are four European and three

American stocks. The most important American stocks

and the four European ones I

considered were because someone wanted to

see what would happen. So you can

see that it doesn't really

change things much, if I put in the stock

and do another simulation without it, the

result will be very similar because

ultimately it's just picking the

two that rise the most. That is to say,

even though there comes a point where adding

more stocks won't change the result

much because you

only pick two out of the 40 that are there,

okay? So it doesn't matter to me how

much I add. You can

have a clear minimum.

A list of fewer than 5, choosing two,

seems excessively small to me, and 7 seems

very tight.

Taking the active stocks, I would put a

list of 10. That's how it's done so you can see.

Here, I could put in a

Russell 2000 Exhalan, which is what I know, so you

can add many more.

And I'm telling you that the The result will be very

similar because, in the end, this

whole rise here

is in the Nasdaq and the S&P 500, because they were the two that

rose the most. So

we're lucky that the stock market isn't

a casino; there's

almost nothing like a

trend, and that's precisely

an event

that isn't random at all. The

trend doesn't just appear out of nowhere. That is to

say,

if it goes up one day, the probability will be

bullish. The probability that it will go up

the next day is very high.

These are dependent events, not

independent ones, like what happens when

20 blacks come up in a

casino. The probability of the

next black coming up is 50%, a little less,

and

even though there were 20 blacks, the next

roll is 50%. That's almost nothing. In the stock market, it's

assumed that things don't always go up,

but the probability that they continue to

rise is high, and that's

defined in the system itself.

When you buy something strong, the priority

of it remaining strong is very high,

and that's what this

system exploits. If you invest in something that is strong,

that has risen a lot, the priority of it

continuing to be so is very high. And

we're not talking about three weeks, but rather

many months.

That's what this system exploits.

As I said, it's the Nasdaq and the S&P 500

here, so it's a mix.

Here, it's also the Nasdaq, much more so,

which has risen a lot. It was almost

always there,

every month it was involved. It's

good, then it alternates, it's a little bit of the

DAX on one hand, then it goes back

to the S&P, and then another index, and another S&P,

and it also pays for the changes, it also

fades.

But of course, the cost of rolling, so to speak,

an index to a sector

with the spread is tiny, it's

wider here. It doesn't matter what that

roll is, but a sector is important,

that roll because we're talking about swings of 0, 2,

1, 3. It depends a bit, of

course. This is a result I

expected here. Well, if it works in

sectors, it has to work in English, for

sure.

And I haven't tried much more.

I insist, the gesture can be mixed in

to see what happens. I'm telling you, it's

very difficult to find any index that

has risen more than... The S&P 500, because the

Nasdaq here, or well, at some point in

Venezuela, it goes up 20%.

Keep in mind

the image of these things

and find assets that ultimately outperform. In the

end, put more

into this new inverse. Effectively, it's

practically out of the

market here, and someone might say, "If I

put them in,

because maybe

some inverse will slip through and make you earn

less

in this system." I've

tried it with some inverses,

and look, it hasn't completely convinced me. It's

more or less the same, but it's

changing more in these periods,

and don't say, "Why do something

if it doesn't earn more?" The result was

similar in terms of

earning a little less, even if

you included the bearish part.

In this case, simply by being out of

the assets, you leave this system on

ice, and that's it, until you

have some momentum. Of course, you've already

seen how there isn't one that goes up,

no positive trend, so it's out. There isn't

one that enters. It's

a way for the alert system to anticipate

what's coming. I already told you that this doesn't

buy at the lowest level, but at the

highest. Of course, it needs... From a drop so

that the inertia comes out negative and

then it's already out

and this will be the warning for the next one, well of

course

all the inertia comes out negative

simply when it has

bought,

but yes we do it, we do it with

the stocks, but not with this

specific system, we do it with a little

more than gold,

the three are, I don't

exit, but I don't buy anymore,

what, man, if you have three and all three

are bearish or out, it's

an interesting way to apply timing,

no,

well, one more application,

in this case, it's one of my doubts, low,

interesting, I always looked for it to have

less than 20 percent, 25 percent more,

above that it's not interesting,

then recover from 55 percent, well

imagine, well,

finally,

the improvements that I have been making, this

system has many years, don't think it's because of

the strange ones, as the

SPFs have been developing,

relatively new in Europe, a long

time for what I was saying, the

lists, well, homogeneous and heterogeneous,

you have to distinguish, it's not the same to do

a test with the

same values ​​as to do it with

different values, and they are different values,

you have something similar to this for the

draw test Higher values ​​mean lower returns,

and in this case, it's the index you

've seen. It

usually works better with lists of homogeneous values.

So, how do I simulate this?

What I do is use an

optimization of m and n parameters

and see what I get. Let me

explain. This 3D graph shows

three combinations of Emery and n, that is,

one or two. It always has

the same volatility in all cases.

And then, well, here you have a

watermark, which is the average return

of the system. What's above it are

the parameter combinations that earn

more than the average, and what's

below are the ones that earn less than the average.

So, it's interesting because the

more peaks this makes, the higher

the average rises, and therefore the more

watermarks we have. The

more optimized it is, so to speak, and the

more dangerous it is to follow this system

the more it remains submerged. In this

case, well, it's not that

submerged. Also, here are simulations with

processors from 4 to 14.

Simulations this long aren't usually done

because, well, it can give you a

wrong idea in the end

that the watermark can end up being much higher

if you do that kind of thing. simulation, but

we see here, well,

9 and 11, and 9 and 11

parameters, that's

one of the rock,

and then here,

also 9, 10, and 11.

This is in terms of European sectors,

for example, well, like this, it's

a

slightly faster list.

The water here is a little higher, that's why, regarding

the subsectors,

even though it gains more, it has a

longer losing streak,

but also because of this, perhaps they

are more about optimizing the

system that exists

--results,

land, that here

the sectors I would be a little

careful with, or I would simply leave it and

do what it does,

but I would include the European sectors

because it has good neighbors,

good neighbors are

thanks,

and if I put here 12, 12, 10, 12

and raise the rest of the parameter, well,

being here, you are

above, it

's a bit interesting to be above

the average, varying the parameters a little,

you get similar results,

that's what you have to look for in

your systems

if you manage to do this simulation that

are at the euro, but if not, with the software

that you use. But if you have to

try to make the graphs in 3D because

they are very visual,

the system is over-timed, and when it is

n't, and I

insist, it's

very well overused,

okay, but that's what I'm saying. Being

overused means that you go

home to the market, set up the system, and it

works, or if it doesn't work, it's because it's

overused.

So, a little

within the range of randomness that

the stock market always has, and the systems,

we are trying to make it less

random. The moment I

go in

with a

European system that they tell me

on the list wins less, wins less,

but it's the one that has a

more stable combination of parameters. I

trust it more. There are

some spikes, and well, maybe I'll get

lucky and right now you go in there, look

how good I am! But the probability of that

happening is low.

I go in, it moves

in an area, it moves, and you go down

in the water

because that's what happens.

When you enter the market, the market makes you do

this, or it works this way, and then of

course, if you have many submerged areas, you've already gone

below, you no longer earn

10%.

We complain about

more things, the ranking issue, what I was telling you,

if you

only take 16, the one that has risen the most of all, well, no, you don't have it,

if you owe 2, right there, there's a guy in two

positions,

34, she's a bit 34, then you have 5 and 6.

In this case, it was done on top of,

and why did I need a larger sample?

If I took 10 positions in a list of

seven, well, I was going to have a problem, that's why I

took a list of thirty-something

to 30, well, this one has gone over its sector,

but know that this

is common to the rest, okay? There's always a

number

that's usually between 2 and

34,

where

and above where you earn the most, and then the

rest, because if you take more, it's the effect

of the moment, because, as we were saying, mother, it dilutes

the effect, hello,

the pattern that you can take advantage of, it's

diluted by that measure that you keep adding more,

well, finally, in this case, it's the

number of positions

so you can see a little bit too that

indeed,

although I take different rock values,

in the end, where

the greatest gain is still in

values ​​between 2 and 4

when you make these charts, that's what it is,

and we're already reaching the

final part, the combination of systems. I

've explained one to you;

this is a 'bonus track'.

Well, you're going to see

other systems that I have.

In this case,

we have a W, shut up, which is stocks, and

this red line is the one that earns the most. And

I could take it and say, well, that's it, it's the one that

earns the most, use that

point, but there's no need to use more systems

because I don't know why, there are times when,

well, this system is out of the

market, it could end up being out of the

market if I can't trade short for whatever

reason. There are times when we're going to be

out of the market,

so I need systems that compensate for

that lack.

A year and a half,

well, here there's one

called a Copo,

and

similar indices, by the way, to this, here they

also use rock and it smooths it out, it's very

similar,

and in this case,

regarding indices,

sometimes an idea, an idea

in the stock, is that around 12.5

annually, the one of The

allocation is around 10.5%,

and then we have the one we've

seen

from the sector list, between 8% and 9%.

You see, this says it's more about

the one that earns less. It

was a bit... I always come here, it's a

spiritual allocation of stocks, and that's it. It looks really

cool, but I didn't want to,

especially because it's used in other

systems that earn less. And that's because

in the end you make a combination. In

this case, the one I use in the investment fund is

43%,

42% stocks, and 15% sectors. It's

15%

because, well, with sectors, you do

n't have to be too concentrated

in the investment. If this were 33,173%,

the capital in four sectors seems

very exaggerated to me. They intend to

depend so much on sectors. I

prefer

stocks. There are 10, it's a diversified group of 10

stocks,

and the sector allocation is 71.

In this case, the sector allocation is less, that's why it

has less. Someone might find it

interesting, and it has less because, since there

are fewer assets, I don't want to

concentrate capital only in that.

You'll think, of course, and it'll be because the one I

know earns the least, right? So,

obviously, with

clear

weighting, the one who contributes the least, so to

speak,

suffers less. Obviously,

the result is that in all these

areas where it's flatter, it

continues to gain, and when it goes down, you manage to make the

stocks fall a little less. You don't just apply it to

stocks; that is, in the end,

you sacrifice a little profit to

obtain—because this isn't, I thought, a huge amount—

we're talking about 1% annually at most.

You sacrifice a little profit

in exchange for obtaining

much smaller volatility. Well, if you

compare it with the percentage drop in the indices

here, and that's it, that's what you

have to do. I'm

speaking as a manager, and I'm

not even talking about

winning a competition, but if you're ever

going to manage a portfolio,

the most important thing you can do is... I'm not getting

into how much capital it is, it's nothing. If you have a

portfolio of 50,000 euros, well, you ca

n't put it all in, obviously,

but that's what you have to do. We have to

try to use a composition of

winning systems, of course. It's okay

if some people earn

half.