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In a message dated 10/26/01 12:42:44 PM Pacific Daylight Time,
hw@xxxxxxxxxxxxxx writes:
<< Mike's formula does in fact work perfectly, although I haven't a clue why!
Putting in say, 59, for acct, gives the correct answer of 4. Typo in your
formula, perhaps?
I really wanted the account, and the amount earned per contract, to be in
thousands, and I found that to get that to work, I had to divide the 0.1 by
1000, and multiply the 5's and 75 by 1000. The 8 stayed at 8. This then
worked as well.
But, if I changed the 5 (or 5000), which, incidentally, is the delta of Ryan
Jones fractional ratio method, then the formula did not work as is, so
presumably the 0.1 or 75 has to be changed also. >>
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Hi Hugh,
Well, with enough prodding even I can learn to read correctly. After your
comments I went back once again and looked at what Mike wrote. And, FINALLY,
I actually read what he wrote as he intended it to be read. You and he are
indeed correct ... his formula works just fine. Apparently any equation
which has more than 1 or 2 sets of paired parentheses is beyond my reading
ability!
With respect to the formula for 'thousands' which you mentioned, if you refer
to Jon's derivation you will find the general formula for this problem ....
so you can use it to determine the correct formula for ANY values of the
account size for A1 (the value needed to trade just 1 contract) and I (the
base amount used to increment the account size, in multiples of I before one
more contract can be traded.)
The formula copied from Jon's post is:
In our case: n = ( 1 + Sqrt(1 + 8*(An-A1)/I) ) / 2
So to express the account size as thousands (1000, 2000 , 3000 etc) as you
want to do, set A1 = 10000 (account size needed to trade 1 contract) and I =
5000. This gives:
n = (1 + sqrt(1 + 8*(An - 10000)/5000))/2
Try this out and see if you agree. If you don't I'm offering a 1 week
warranty to help resolve any issues. <G>
Regards,
Lee Scharpen
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