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Superfragalist,
What a wonderful formula you gave us! The key to making money in the
stock market is knowing how to manage risk and reward, and your
formula makes it easy. The Turtles used ATR(14) combined with a
calculation for the value of a futures contract; but I never
translated that calculation to stocks.
Do you use this formula to tell you when to adjust your position in a
stock? In other words, do you sell half of the position when the ATR
gets to a certain point, which would re-balance the risk?
I already subscribe to Roy's letter, and look forward to every issue.
dm
--- In Metastockusers@xxxxxxxxxxxxxxx, "superfragalist"
<jackolso@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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