Equity definition for child strategy in combination strategy backtest- your clarification needed
Author: lookingbackon
Creation Date: 8/18/2011 12:19 AM
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lookingbackon

#1
Hello,

I'm not quite clear what is the exact definition for the up-to-day "Equity" of each child strategy. Does it link to the up-to-day overall account equity by the "Percent of Starting Allocation" or only refer to the up-to-day child strategy account itself which equal to :Starting Capital plus/minor up-to-day profit/lost of the child strategy?
Thanks

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Cone

#2
QUOTE:
Does it link to the up-to-day overall account equity
No.

Percent of Starting Equity is a convenient way to split up the specified amount of starting equity, but that's where it ends. Each strategy is confined to it's individual allocation, and therefore has it's own equity curve and constraints for position sizing.
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lookingbackon

#3
Hello Cone,
It's clear now. Thanks
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