Hi,
I remember reading about a game where we have equal number of win/loss draws with 1:2 R:R and the final answer is always the same. Can anybody point me to that thread please?
Regards
Krist.
The MM game is like this :
1) Starting capital Rs 1,00,000
2) Total 40 trades, out of which 20 will be winners, 20 will be loosers.
3) On every trade we risk 25 % of the cumulative equity balance. ( risking 25 % is too high but taken as illustration )
4) Wins and loosers can come in any sequence but we must have 20 winners and 20 loosers.
5) Suppose our cum. equity is say Rs 1 L at any point,( or at start) we risk 25,000 on the next trade. If the next trade is a winner, we make profit of 2R ie 50,000 and our cum.equity becomes 150000 and if it is a looser then cum equity becomes 1,00,000-25000=Rs 75000 so on next trade we risk 25 % of Rs 75000....
The ending balance will be constant irrespective of the sequence of wins/loss.It will be over Rs 14 L . Try this out on paper or in Excel sheet.
Smart_trade