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Maybe a good thing would be to change the formula to show the risk, so
then you can decide how much you would trade. That way, a cowboy as
well as a coward (to use some analogy) could use the same indicator.
The cowboy will allocate say 5% of his capital to it while it is below
say 5% and 2.5% above, the coward will allocate 1% to it and nothing
above 2 etc.
Regards
MG Ferreira
TsaTsa EOD Programmer and trading model builder
http://www.ferra4models.com
http://fun.ferra4models.com
--- In equismetastock@xxxxxxxxxxxxxxx, superfragalist <no_reply@xxxx>
wrote:
> 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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