Which other settings or rules can I add to my models?

Modified on Mon, 28 Apr at 7:11 PM

Beyond asset selection and allocation, Fincanva allows you to fine-tune your models using additional rules — known as Other Model Settings. These settings give you greater control and help simulate more realistic trading behavior.

Available Model Rules

1. Maximum Holding Period

Limits how long an asset can be held within the model. After the defined number of months, the asset is automatically sold, even if it still meets your selection criteria.

Useful for:

Enforcing time-bound strategies.
Maintaining regular turnover in your portfolio.

2. Reinvestment Delay

After an asset is sold, this rule enforces a waiting period before that capital can be reinvested. Helps avoid excessive trading and simulates operational delays (e.g., settlement periods or strategy cool-downs).

3. Stop Loss / Take Profit Logic

Set automatic thresholds to exit positions based on performance:

Stop Loss: Exit if a loss exceeds a specified percentage (e.g., -10%).
Take Profit: Exit if a gain reaches a specified percentage (e.g., +20%).

Example

Set a Stop Loss at -10% and a Take Profit at +20%. If an asset’s performance crosses either threshold, the model sells the position at the next rebalance.

How These Rules Interact with Rebalancing

All model rules are checked and applied at the model’s rebalance points — not immediately.

Behavior	Explanation
Stop Loss / Take Profit	Triggered only at rebalance intervals (e.g., monthly), even if threshold is crossed mid-period.
Maximum Holding Period	Measured in multiples of the rebalance frequency (e.g., if rebalance = every 3 months, holding period must be 3, 6, 9 months, etc.).
Reinvestment Delay	Also tied to rebalance cycles — waits for the defined number of periods before reinvesting.

Important

Time-based rules (like Maximum Holding Period and Reinvestment Delay) must be defined in multiples of your model’s rebalance frequency.
Example:

If you rebalance every 3 months, valid maximum holding periods would be 3, 6, 9 months, etc.

Why Use These Settings?

By configuring additional model rules, you can:

Reflect real-world operational constraints.
Reduce portfolio churn by controlling turnover.
Manage risks through structured exit strategies.
Build more practical, realistic models that behave like live investment systems.

These tools give you a deeper level of precision and control over your strategy's execution.