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PureBytes Links
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you don't know what is a CFD?
contract for difference
the most hot leverage product in europe right now
http://en.wikipedia.org/wiki/Contract_for_difference
you can trade cfd's with:
www.saxobank.com
www.cmcmarkets.com
regards
--- In equismetastock@xxxxxxxxxxxxxxx, "Lionel Issen" <lissen@xxx> wrote:
>
> What is CFD?
>
>
>
> Lionel
>
>
>
> From: equismetastock@xxxxxxxxxxxxxxx
[mailto:equismetastock@xxxxxxxxxxxxxxx]
> On Behalf Of leeontherun
> Sent: Saturday, June 21, 2008 9:31 PM
> To: equismetastock@xxxxxxxxxxxxxxx
> Subject: [EquisMetaStock Group] Position Sizing
>
>
>
> POSITION SIZE CALCULATION & CAPITAL RISK
>
> There seems to be a lot on formula generation but one thing I learnt
> after a few years of trading is that your formulas and backtest work
> can pretty much be thrown out the window if you don't take the time
> to size up your risk especially if you are heavily margined.
> Personally, with CFD's I can margin 100 times my intial equity, so
> there is huge risk involved.
>
> I'd like to share with you some results of research and in return
> hope for other's research on position sizing or articles they have
> read and can submit. It is worth taking the time to post this
> information.
>
> In the Equismetastock yahoo group 'Photos' you will find a folder
> called 'Position Sizing' that this post refers to. This folder has
> several graphs on position size calculations. I'd advise you visit
> the photos section now and save the pictures to your computer.
>
> My research involves using a % of your capital to trade in place of a
> fixed position size. That means that as you take winners and your
> capital grows, so does your position size and in effect gives you
> exponential growth. The reverse of this is if you were to take some
> losers first then your % of capital to trade size will be getting
> smaller, but in the long run you should be able to pull yourself out
> if your backtested plan shows larger number of winners than losers.
>
> This backtested plan showed the largest number of consecutive losers
> was given to be '4' with the average loss size shown on the left hand
> side of the results chart depending on what % of capital you trade.
>
> Now here is the trick!
>
> Lets assume we hit the worst case scenario and took '4' consecutive
> losers first before we had a regular pattern of winners and losers.
>
> When graphing this information, if you look at the chart of 4
> consecutive losers it shows you a sweet spot of what % of capital
> would be best used before it starts to have a poorer efficiency i.e.
> you ideally would like to keep on the left hand side of the curve
> before the peak. So in this example 10% or maybe even 12.5% of
> capital should be traded.
>
> Now say you wanted to play it safe and use a fudge factor that we may
> get 5 consecutive intitial losers or maybe even 6, then you just need
> to look at the respective charts.
>
> This is so far working great for my trading.
>
> Lee.
>
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