|
PureBytes Links
Trading Reference Links
|
An Excel worksheet has been uploaded to the files section that allows
you to play with these parameters.
the title is "ExpectancyAnalysisDerived.xls"
David is correct:
Risk = $$$ you are willing to lose on a trade - as a % of portfolio
Position Size = $$$ invested - How many shares do I buy ?
Expectancy = $$$ profit you make/lose on a trade before doing
something (exit, increase position, sell 1/2 etc)
--- In equismetastock@xxxxxxxxxxxxxxx, "david" <dwei9361@xxx> wrote:
>
> 1. Case two
>
>
>
> risk% * total_capital / (entryprice - initialstop)
>
>
>
> = 0.02 * $100000 / $2 = 1000 shares, assuming your entry price was
$10 and
> your intial stop was $8
>
>
>
> So actually 10% of your capital will be committed to the trade in
this case.
>
>
>
>
> 2. You may want to look at using a measure of volatility such as the
ATR in
> determining your position size.
>
>
>
> Also you may want to consider putting a firm limit on the maximum %
of total
> capital you will allocate to any one trade.
>
>
>
> Regards
>
>
>
> Dave
>
>
>
>
>
> _____
>
> From: equismetastock@xxxxxxxxxxxxxxx
[mailto:equismetastock@xxxxxxxxxxxxxxx]
> On Behalf Of chichungchoi
> Sent: Wednesday, 8 March 2006 10:58 AM
> To: equismetastock@xxxxxxxxxxxxxxx
> Subject: [EquisMetaStock Group] Risking 2% for investment, but what
to do
> with the the rest of 98%?
>
>
>
> Account balance is $100,000, I would like to risk 2% [$100,000 x 2% =
> $2,000] for my investment and would like to purchase XYZ stock at $10,
> and project the target level at $14 with stop loss level at $8.
>
> How much shares should I purchase?
>
> In case 1, number of shares = $2,000 / $10 = 200 shares.
> I should invest $2,000 for this trade, and require only $2,000 for this
> investment. Do I put $98,000 into saving account?
>
> In case 2, number of shares = $2,000 / ($10-$8) = 1,000 shares
> I should risk $2,000 for this trade, and require 1,000 x $10 =$10,000
> for this investment. Do I put $90,000 into saving account?
>
> Does anyone have any suggestion on how much shares I should purchase
> for 2% risk? How to utilize more capital for investment and still
> maintain 2% risk?
> Thank you
> Eric
>
>
>
>
>
>
>
>
> _____
>
> YAHOO! GROUPS LINKS
>
>
>
> * Visit your group "equismetastock
> <http://groups.yahoo.com/group/equismetastock> " on the web.
>
> * To unsubscribe from this group, send an email to:
> equismetastock-unsubscribe@xxxxxxxxxxxxxxx
> <mailto:equismetastock-unsubscribe@xxxxxxxxxxxxxxx?subject=Unsubscribe>
>
> * Your use of Yahoo! Groups is subject to the Yahoo!
> <http://docs.yahoo.com/info/terms/> Terms of Service.
>
>
>
> _____
>
>
>
> [Non-text portions of this message have been removed]
>
------------------------ Yahoo! Groups Sponsor --------------------~-->
Try Online Currency Trading with GFT. Free 50K Demo. Trade
24 Hours. Commission-Free.
http://us.click.yahoo.com/RvFikB/9M2KAA/U1CZAA/BefplB/TM
--------------------------------------------------------------------~->
Yahoo! Groups Links
<*> To visit your group on the web, go to:
http://groups.yahoo.com/group/equismetastock/
<*> To unsubscribe from this group, send an email to:
equismetastock-unsubscribe@xxxxxxxxxxxxxxx
<*> Your use of Yahoo! Groups is subject to:
http://docs.yahoo.com/info/terms/
|