RE: [amibroker] Help please - Maximum equity risk per trade, AmiBroker Email List Archive

No, that’s not a correct assumption. The SetPositionSize specifies the maximum amount of your equity that is used when a trade or position is opened. Since GBPUSD is a highly leveraged instrument that uses a margin deposit, it can move in value significantly more than your initial position size. You should be able to easily verify this for yourself, just look at the individual trades from the backtester and you’ll see whether or not losses go beyond 5%.

If you were buying stocks without margin, then your assumption would be true because you would pay the full cost of the stock and it can only fall to zero which would be 100% of the position size.

You’ll probably need to use ApplyStop to handle a 5% loss.

Regards,

David

From: amibroker@xxxxxxxxxxxxxxx [mailto:amibroker@xxxxxxxxxxxxxxx] On Behalf Of dralexchambers
Sent: 03/11/2007 9:03 AM
To: amibroker@xxxxxxxxxxxxxxx
Subject: [amibroker] Help please - Maximum equity risk per trade

Can someone verify this for me please:

Am I correct in assuming that if I set the risk at 5% using
SetPositionSize() on my GBPUSD backtest, if my initial buy is
triggered and then I am instantly stopped out, the maximum I will
lose will be 5% of my account:

SetPositionSize(5, spsPercentOfEquity );

I am setting my own Buy and Sell rules, eg:

Buy = Cross(PDI(8),MDI(8);

Sell = C < MA(C, 5);
SellPrice = O;

But I am not using ApplyStop(), as my Sell rule is defined above.

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