Portfolio Settings - Limiting trading to cash in account

Hi,

I have a portfolio of stocks and my initial capital is set to $100K.

I have the following query with regards to margining in the portfolio backtesting.

If I set "Absolute Max Potential Loss to $0.001" i.e off and "Margin value % of contract cost" to the following

1. 0 % - No Limit to buying ?
2. 100% - Limit max positions on to numshares1*entryprice1 + numshares2*entryprice2 <= $100k (i.e. Initial Portfolio Capital) or Accumulated PnL overtime?

3. Therefore 25% would be 4:1 margining/leveraging etc. ?

Regards

Is this correct for stocks?

Is there a comprehensive manual on this Portfolio Backtesting that gives examples etc.?

Is there a comprehensive manual on this Portfolio Backtesting that gives examples etc.?

Not with examples, but if you haven't done already, you can take a look at the MultiCharts manual found here (the 'MultiCharts Printer-friendly Manual' hyperlink). See chapter 4.10 (Portfolio Backtesting), starting on page 234, and page 244 ('Portfolio Settings').

Regards,
Josh

Thanks Josh

Can someone from MC answer my questions at the top of the post?

Thanks

Hello Morgan.
1. Yes that is correct. If Margin value % of contract cost is set to 0 % then Absolute Max Potential Loss $0.001 is limiting buying.

2. 100% means you are risking 100% of contract cost.
Calculation is done using the formulas:
Current available account funds "Portfolio_Equity":
Portfolio_Equity = InitialCapital + Portfolio_NetProfit + Portfolio_OpenPositionProfit – TotalPotentialRiskCapital
• Portfolio_NetProfit – current profit for entire portfolio. The sum of NetProfit for all symbols (Keyword «portfolio_netprofit»)
• Portfolio_OpenPositionProfit – current potential profit for entire portfolio.
The sum of OpenPositionProfit for all symbols (Keyword «portfolio_openpositionprofit»).

TotalPotentialRiskCapital = the sum of PotentialRiskCapitalForSymbol for each symbol;

PotentialRiskCapitalForSymbol = the sum of PotentialRiskCapital for each ENTRY in POSITION;

Max potential risk per trade:
PotentialRiskCapital = Quantity*(MaxPotentialLossPerContract+MarginPerContract + CommVpc + SlippageVpc) + CommVpt + SlippageVpt;
• Quantity - the amount of contracts;
• CommVpt – Comission value in per Trade mode. If the other mode is selected, the value is set to 0.
• SlippageVpt – Slippage value in per Trade mode. If the other mode is selected, the value is set to 0.
• CommVpc – Comission value in per Contract mode. If the other mode is selected, the value is set to 0.
• SlippageVpc – Slippage value in per Contract mode. If the other mode is selected, the value is set to 0.

3. 25% means you are risking 25% of contract cost.

Unfortunately there is no separate manual for Portfolio Backtesting.
You can find the information about it in MultiCharts help file.

Still dont understand - lets keep it simple

for 2 does the 100% setting LIMIT the current positions on to the total equity in the account i.e Portfolio_Equity ?

e.g If I have $100k in the account at a certain point in time does the max open positions(the accumulation of all the open positions) be limited to that $100k with this setting ?