Nothing ever gets sorted out on threads like these....it kinda brings into Q why anyone bothers to contribute....I'm as guilty as the rest btw.
Anyway...for once, why don't we all try to determine exactly what this strat should be and exactly what risks we need to factor in. It's probably too much of an ask, as everyone will still have different opinions at the end of it.
I did notice that ex-div day adjustments had not been mentioned and as we know, these can be dramatic in terms of cost if possies held overnight or for a few days.
The other glaring error is ratios...it's not really good enough to introduce an obvious error right from the get go..... 2 ftse = 1 dow as it is clear that 50% of the time, we would already be at a disadvantage in either a long/short or short /long situation....so this needs firming up as a starting point from where other adjustments can be factored into the equation....like DT's currency risk.
Current ftse / dow ratio is 2.438 , so in terms of staking, that would be £2.40 ftse to £1.00 dow. Most SB allow 1/10 positions so £2.40 wouldn't be a problem. But this is only the starting point calculation. I seem to remember last yr or previous yr, the ratio was £2.20 - £1.00 So clearly this ratio can and does change over time.
Is it even possible to reduce everything down to a set of equations to produce a model to trade from ?