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Individual traders are willing to undertake different amounts of risks
per trade based on the size of their capital account, systems
performance and psychological make-up.
In general, most experienced traders stay within 1% to 3%. I usually
stay with the lower number.
--- In equismetastock@xxxxxxxxxxxxxxx, "metastkuser"
<andysmith_999@xxxx> wrote:
> Super,
>
> I understand the volatility-based sizing, but have a question about
> the fixed fractional risk number itself.
>
> Say you choose your risk per trade to be 2% of account equity. Do you
> ever modulate that 2% (say to 1% or 3%) based on how your portfolio
> equity curve is doing, or based on if you are in a winning streak or
> losing streak? If so, can you share your experience?
>
> I find it odd that there is much published work about money mangement
> when it comes to futures/comodities, but little related to stocks....
>
> As always, thanks much for your guidance.
>
>
>
> --- In equismetastock@xxxxxxxxxxxxxxx, superfragalist <no_reply@xxxx>
> wrote:
> > I have been accused of promoting Roy's newsletter. That accusation is
> > alleged and the merit as yet undetermined. Without admitting or
> > denying anything, if it sounds like I promote the newsletter, it's
> > because it's such a good MS tool that I think every MS user should use
> > it.
> >
> > In fact, Equis should give everyone who purchases MS a free one year
> > subscription. (I'm sorry, I lost my head for a minute. I know that's
> > just being too rational.)
> >
> > However, unlike Equis I don't ignore the users and what they need to
> > be successful. So as a gift to everyone who subscribes to Roy's
> > newsletter this month, I'm going to give you a terrific position
> > sizing indicator that calculates the number of shares of a particular
> > stock that you should buy based on your personal risk profile and the
> > volatility of the stock.
> >
> > This is a powerful tool for position sizing, so don't ignore it. Test
> > it out and see if it improves your returns. It's based on sound theory
> > of money management.
> >
> > CapitalAccount:=Input("Size of Capital Account",5000,10000000,100000);
> > RiskPercent:=Input("Account Risk Tolerance in
> Decimals.",0.001,100,0.01);
> > {This is the amount of your account balance you're willing to lose per
> > trade-- 0.01 equals 1%.}
> > VT:=Input("ATR Periods for Calculating Volatility.",1,100,10);
> > Bars:=Input("Number of Bars for Smoothing ATR.",2,100,10);
> > WhimpFactor:=Input("Personal Risk Profile-1 Cowboy to 7 Whimp",1,7,3);
> > {1 means you ride bulls and live hard, 7 means you're Mister
> > Rogers--most people fall in between.}
> > x:=Mov(ATR(VT),Bars,S);
> > RiskPercent*CapitalAccount/(x*WhimpFactor)
> >
> > Plot this on the chart and read the shares to include in your
> > portfolio at the current price.
> >
> > Yes, I know I'm giving it to you before you subscribe. I work off of
> > the honor system, so I know that everyone who reads this will honor
> > the deal and sign up. This one indicator alone is worth the price.
> >
> > www.metastocktips.co.nz
> >
> > I know who's being naughty and nice, I'm making a list and counting it
> > twice. So look out, Christmas is coming. It's not a good time to be
> > breaking the honor code. Okay!
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