Daily target of 5%

#41
Just wanted to know anybody read mathmatics of money management by ralph vince
My long term plan is to have risk management system based on his optimal f ratio but its too dense of a read and requires considerable work from our side....
So my question to senior members is have you build a model based optimal f and is it worth the effort?
 
#42
Then the solution would be fixed RR?
Our system should have positive expectancy.Expectancy is a function of 1) our success rate meaning how many trades are profitable and how many trades are losing trades and 2) average amount or points made in successful trades and points lost in loser trades.

Normally the systems will have a hit rate of 50-55% or less...so our winning trades have to be at least 1.5 times the points lost on losing trades to take care of loosing trades and slippage,brokerage,taxes etc.....

Smart_trade
 
Last edited:

siddhant4u

Well-Unknown Member
#43
Our system should have positive expectancy.Expectancy is a function of 1) our success rate meaning how many trades are profitable and how many trades are losing trades and 2) average amount or points made in successful trades and points lost in loser trades.

Normally the systems will have a hit rate of 50-55% or less...so our winning trades have to be at least 1.5 times the points lost on losing trades to take care of loosing trades and slippage,brokerage,taxes etc.....

Smart_trade
Very well said. I have 70% winning rate but the loss per trade is way higher than profit per trade and its taking me nowhere. :(

And its me and not the system at fault here. Holding on to losses for too long also fear of loosing makes me cut profits early on.
 

Similar threads