You can rebalance your portfolio in two ways:
- Periodically
- Continuously
Navigate to the Trade and Rebalance options in the Strategy Edit page:
Rebalancing periodically
1) To rebalance your portfolio periodically, enter the number of ‘Sell After Days’ you want. Below, you can see that 365 has been entered. This rule will automatically sell all your positions after 365 days. On the following day it will re-buy stocks according to your buy criteria and your portfolio will be rebalanced according to the Position Size you’ve chosen in the portfolio settings section:
2) If you wish to only sell companies you have lost money on, tick the Only sell losers’ box:
3) You can prevent your strategy from re-buying the stocks you previously held by entering the number of days you wish the engine to dismiss those stocks for:
Rebalancing continuously
To rebalance your portfolio continuously, choose the method you would like to use from these options or any combination:
- Buy more if price falls
- Stop loss on drop of
- Sell on rise of
These three options allow you to control how you’d like to manage the stocks in your portfolio.
You can use the “buy more if price falls” function to average up or average down on any particular stock.
To average up (i.e. buy more) enter the price decline value you would like the ‘buy more’ trigger to action. For example, if you enter 25%, the engine will buy another allocation of shares of the companies’ in your portfolio if they fall by 25%. This allows you to build up a larger position as the stock price declines.
Note: you can also enter a negative number, which will average down as the price rises.
If you select the Check original criteria box as below, the engine will check to see if that particular company still meets the original buy criteria you have set.
To limit the number of times this rule can be conducted on any one stock, enter a value in ‘Max’ box. You can see the number ‘3’ has been entered below. This means the engine can only trigger three ‘buy more’ actions for any particular stock.
To sell companies which have declined in price, enter your stop loss value by selecting the check box and entering a percentage value.
Below you can see 30 has been entered. This will sell the position if the stock declines in value by 30% or more. If the Trailing box is selected, the stop loss will trigger based on the previous periods price value rather than the current periods.
You can also prevent the engine from re-buying that stock for a specified number of days by entering the number of days you don’t want the engine to buy that stock for:
To ensure that your portfolio doesn’t become overly concentrated in a few hot performing stocks, you may wish to enter a ‘Sell on rise of’ value. In this example a value of 300% has been entered. This will sell any position which has risen by 300% or more:
If you wish to keep an allocation in your portfolio of those good performing stocks, you can enter the percentage amount you’d like the engine to sell (and the remainder to keep).
For example, the engine will sell 80% of any position which has risen by 300% or more. It will keep the remaining 20% in your portfolio:
