Assuming you have the holy grail of trading system, how do you plan your trades?

To add comments, please log in or register
Zee Zhou Ma
1495
Zee Zhou Ma  

This question is assuming 100% win ratio, but you do not use cut loss and have drawdown to worry about.

How do you plan your trades in such a way that you will never burst your account, but yet use all available margin?


I know many people have answered this type of questions before. 

I know you will put me off by saying I must be dreaming. But hope that you know I am asking an intelligent question. 

Rational behind this thought process: Once the maximum position size is known, we can then work backwards to determine n < N on the position size and number of trades.

N = Maximum Risk, and n = risk that you will take normally.

One may decide to first use risk n to trade normally, and subsequently risk N to do loss recovery on any prolonged paper loss due to risk n. 


Will you use the kelly criteria? Or devise some way to increase your returns in terms of magnitude?

Do you have a formula to calculate your position size according to drawdown used?

Do you come across scripts or indicators that can help to compute maximum position size for risk N? If so, please put their links here.


I can clarify the question again, if you need me to explain certain points.

This question is important to me.


Thanks

Enrique Dangeroux
410
Enrique Dangeroux  

Zee Zhou Ma:

assuming 100% win ratio

If no loss, what is there to discuss or answer?

Icham Aidibe
11287
Icham Aidibe  
Zee Zhou Ma:

This question is assuming 100% win ratio, but you do not use cut loss and have drawdown to worry about.

How do you plan your trades in such a way that you will never burst your account, but yet use all available margin?


I know many people have answered this type of questions before. 

I know you will put me off by saying I must be dreaming. But hope that you know I am asking an intelligent question. 

Rational behind this thought process: Once the maximum position size is known, we can then work backwards to determine n < N on the position size and number of trades.

N = Maximum Risk, and n = risk that you will take normally.

One may decide to first use risk n to trade normally, and subsequently risk N to do loss recovery on any prolonged paper loss due to risk n. 


Will you use the kelly criteria? Or devise some way to increase your returns in terms of magnitude?

Do you have a formula to calculate your position size according to drawdown used?

Do you come across scripts or indicators that can help to compute maximum position size for risk N? If so, please put their links here.


I can clarify the question again, if you need me to explain certain points.

This question is important to me.


Thanks

Fixed lot, according to account balance. With no stoploss the story always the same 
Zee Zhou Ma
1495
Zee Zhou Ma  

There is still drawdown to take care. You can burst your account if position size is too large. 

I am looking for a formula which takes in N number of trades, and drawdown such that drawdown will not burst the account.

Mrluck07
425
Mrluck07  
It depends, do you know it will be 100% wins before place the trades or after?
EA-trader
651
EA-trader  

I always mess up with greed,fear and emotions, so I use EAS.


I don't trade at all.EAS trade.

Marco vd Heijden
Moderator
8167
Marco vd Heijden  

I can only tell you that it exists.

It does exist.

And when you master it, You don't have to plan your trades.

The things you mention become meaningless. 

EA-trader
651
EA-trader  
Mrluck07:
It depends, do you know it's 100% wins before place the trades or after?

If  I know before , and I lose , I get revenge trades , so double up and lose 100*2 = 200%.

Zee Zhou Ma
1495
Zee Zhou Ma  
Mrluck07:
It depends, do you know it's 100% wins before place the trades or after?

If your account size is large like for example $10,000, and you are using 0.01 lot size to trade, it is 100% win. In that case, you will want to keep increasing the lot size until you use all the available margin without bursting the account. 

But you know you cannot set a random lot size without calculated risk or create another demo account to keep sending 0.01 lot size to know maximum number of trades you can use.

There should be a formula to this.. but my small brain can't fathom how to do it.

Marco vd Heijden
Moderator
8167
Marco vd Heijden  

Your making this way way too difficult.

Think of a holy grail like a glitch or loop hole in the system.

Normal rules don't apply.

Zee Zhou Ma
1495
Zee Zhou Ma  
Marco vd Heijden:

I can only tell you that it exists.

It does exist.

And when you master it, You don't have to plan your trades.

The things you mention become meaningless. 

Hmm... I am asking because.. i like to solve problems, and see maximum lot size allocation work on my trading account.

Yes I know holy grail does exist. =)
To add comments, please log in or register