iii) probability=3sigma or 99.8% win for a +1% correction, over 1 day period
use a leverage of position size=10x acc
i.e. 100k$ position which is offered on typical forex std/10xdow/100xgold/2x future (fxsol or fxcm)
set s/l at -20pips, set t/p at +100 pips,
so maximum dynamic loss is -2% of acc per deal, gain is +10% per deal
hold for one day period, there could be one kind of this oppotunity in a year
if all hit t/p, annualized return is 10%*1=10%, calc probability it's 10%*99.8%=10%
if all hit s/l, annualized loss is -2%*1=-2%, calc probability it's -2%*2%=-0.04%
so by probability loss over a year is expected to be +10%, risk is well controlled, spread is 0.1%*10 or 1% cost of acc
.... summary is this is a H4 T/F S/R rebounce or trend riding or correlation/correction trading with an order holding duraton of 1-2 day, an expected return of 9% a year and max position=10x acc.
use a leverage of position size=10x acc
i.e. 100k$ position which is offered on typical forex std/10xdow/100xgold/2x future (fxsol or fxcm)
set s/l at -20pips, set t/p at +100 pips,
so maximum dynamic loss is -2% of acc per deal, gain is +10% per deal
hold for one day period, there could be one kind of this oppotunity in a year
if all hit t/p, annualized return is 10%*1=10%, calc probability it's 10%*99.8%=10%
if all hit s/l, annualized loss is -2%*1=-2%, calc probability it's -2%*2%=-0.04%
so by probability loss over a year is expected to be +10%, risk is well controlled, spread is 0.1%*10 or 1% cost of acc
.... summary is this is a H4 T/F S/R rebounce or trend riding or correlation/correction trading with an order holding duraton of 1-2 day, an expected return of 9% a year and max position=10x acc.
Attached File(s)