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Dave,
I thought my simple math explanation would have sufficed but
apparently it didn't ...
Example 1: You have 10,000 initial equity ... you invest it all in
XYZ which goes up 10% so you have 100 profit and 10,100 total equity
to reinvest.
Example 2: You have 10,000 initial equity ... you invest 10% of it or
1,000 in XYZ which goes up 10% so you have 10 profit and 10,010 to
reinvest NOT 10,100 because the 10% gain was on the amount invested
not on the initial equity because 90% of the initial equity was
either still in cash or invested in something else.
Fred
--- In amibroker@xxxxxxxxxxxxxxx, "Dave Merrill" <dmerrill@xxxx>
wrote:
> thanks Tomasz, I realized that the percentage figures must be
relative to
> the entire account size.
>
> however, the way profits are reinvested if positionsize isn't 100%
seems
> very strange to me, possibly not what you intend.
>
> look at these two trades, the first two in one of the stocks at 100%
> positionsize:
>
> Profit Shares Position
> 948.62 632.41 10,000.00
> 276.68 632.41 10,948.60
>
> the first trade made $948.62 profit, which the second trade
invested, taking
> a $10,948.60 position.
>
> here's the same two trades with 10% positionsize:
>
> Profit Shares Position
> 94.86 63.24 1,000.00
> 25.51 58.31 1,009.49
>
> the first trade made $94.86 profit, but the second one invested
only 10% of
> that profit, taking a $1,009.49 position. that doesn't make sense
to me.
>
>
> am I off base here? in what situations is this behavior
appropriate? is
> there any way to get AB to invest all profits from each stock if
> positionsize isn't 100%?
>
> thanks,
>
> dave
>
>
> > Indeed % results are accurate but always related to total initial
equity,
> > regardless of position size you set with each trade. If you have
> > 90% of equity in cash your percentage risk/drawdown/etc is of
course 1/10
> > of values that you would expect trading 100% of your funds.
> >
> > Best regards,
> > Tomasz Janeczko
> > amibroker.com
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