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Question about Dial's post on asymetrical leverage

  • Post #1
  • Quote
  • First Post: Oct 10, 2006 10:40am Oct 10, 2006 10:40am
  •  mpathare
  • | Joined Jun 2006 | Status: Great Googley Moogley! | 53 Posts
First,
Thank you Dial for all your posts. They are very helpfull. In your last post in the MM sticky you said

Quote
Disliked
Stop here and think a minute... we had to trade two contracts since the account was at 3500.00. At first we were risking almost exactly 2 percent of our equity. 3500 * .02 = 70.00. Two contracts (or a 20,000 position size) risking 35 pips is exactly two percent of our account working for us on each trade at that account level. However as we chalk up winners we cannot increase our position size until we earn another 1800.00. Each time our equity grows our ability to increase our risk (and our position size) does not -- until we have pocketed that 1800.00 in our winnings.

Our leverage decreases as our account increases up until the point where we can increase our position size by another 1800.00 in the example shown. At this point our leverage increases again to 2 percent but again as our account increases our leverage decreases. Many people have been able to grasp this point of asymetrical leverage and explain it but what is missing in most cases is the impact on our trading system and our account growth. I'll try to explain it in some more detail below for those who do not yet see the full implications.

If I have a $1000 micro account and risk 2% on every trade with a 40 pip SL You would be trading 5 lots with a 5:1 true leverage. Now since you round down position sizes you will not be able to trade 6 lots untill your account balances reaches $1200

with each pip = $0.10 on a micro account you will need to make 2000 pips before your account balance reaches $1200. That would be quite a lot of winning trades.

My question is, isnt this situation simillar to the one you described when using a mini account? Then how is a using a micro account better if you cant risk 2% on every trade without screwing up your MM? From reading stuff on FF I thought getting a micro account would eliminate the problems of asymetrical leverage.

Thanks for all your help.
  • Post #2
  • Quote
  • Oct 10, 2006 2:10pm Oct 10, 2006 2:10pm
  •  mpathare
  • | Joined Jun 2006 | Status: Great Googley Moogley! | 53 Posts
Bump ^^^^^^
 
 
  • Post #3
  • Quote
  • Oct 10, 2006 2:26pm Oct 10, 2006 2:26pm
  •  twinchell
  • | Joined Apr 2006 | Status: Ousted Member | 540 Posts
Quoting mpathare
Disliked
Bump ^^^^^^
Ignored
Relax fella', go play the Penguin game.
 
 
  • Post #4
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  • Oct 10, 2006 2:44pm Oct 10, 2006 2:44pm
  •  diallist
  • Joined Sep 2004 | Status: Member | 1,464 Posts
Quoting mpathare
Disliked
First,
Thank you Dial for all your posts. They are very helpfull. In your last post in the MM sticky you said



If I have a $1000 micro account and risk 2% on every trade with a 40 pip SL You would be trading 5 lots with a 5:1 true leverage. Now since you round down position sizes you will not be able to trade 6 lots untill your account balances reaches $1200

with each pip = $0.10 on a micro account you will need to make 2000 pips before your account balance reaches $1200. That would be quite a lot of winning trades.

My question is, isnt this situation simillar to the one you described when using a mini account? Then how is a using a micro account better if you cant risk 2% on every trade without screwing up your MM? From reading stuff on FF I thought getting a micro account would eliminate the problems of asymetrical leverage.

Thanks for all your help.
Ignored
Great question mpathare! I'm at work now. I'll answer in detail this evening.

BTW, it wont take 2000 pips to go from $1000 to $1200. It only takes 400 pips. Can you see why?

Dial
sxaxlxvxaxtxixoxnxbxyxgxrxaxcxexdxoxtxoxrxgx
 
 
  • Post #5
  • Quote
  • Oct 10, 2006 2:48pm Oct 10, 2006 2:48pm
  •  mpathare
  • | Joined Jun 2006 | Status: Great Googley Moogley! | 53 Posts
Quote
Disliked
BTW, it wont take 2000 pips to go from $1000 to $1200. It only takes 400 pips. Can you see why?

Oops, yea. You are trading 5 lots so its 2000/5 = 400 pips....
 
 
  • Post #6
  • Quote
  • Oct 10, 2006 6:23pm Oct 10, 2006 6:23pm
  •  SeekingLight
  • Joined Jul 2006 | Status: Charts + PA > * | 3,251 Posts
Hi!
I've argued over this with a friend before, too.
The point I believe is finer granularity.
If I can only increase my stake in increments of 1$ per pip then I am stuck needing to increase account size accordingly before being able to scale up.

If I can have 10 cent precision(and still trade any stake from 10 cent to 10$ but with finer tuning), then I can simply scale up with a lot more detail and slowly ramp up the stake by increments of 10 cent, with more precision. I therefore am able to scale up much, much earlier, proportional with the growing account size(using a set percentage of risk).
This accelerates growth by a lot, since you can increase stake earlier on.

That's all the magic there is to it. The logic itself should ring true even without needing to add a truckload of number examples (more confusing to me really, the granularity and scaling logic should be clear enough in itself I hope).

Just my attempt at explaining.

Take care
Trust price. Know yourself.
 
 
  • Post #7
  • Quote
  • Oct 10, 2006 10:38pm Oct 10, 2006 10:38pm
  •  mpathare
  • | Joined Jun 2006 | Status: Great Googley Moogley! | 53 Posts
@Seeking

I dont think I quite understand what you are trying to say.

In my hypothetical example you would have to earn 400 pips before you could increase your number of contracts to 6 from 5. So that means for the say 5-6 winning trades it takes you to make 400 pips you will be using less leverage and risking less of your capital for each successive trade untill you reach $1200. At which point you can increase your number of contracts to 6.

This is quite simillar to what Dial was talking about with the mini account so I dont understand how having a finer grain as you say helps?
 
 
  • Post #8
  • Quote
  • Oct 10, 2006 10:51pm Oct 10, 2006 10:51pm
  •  diallist
  • Joined Sep 2004 | Status: Member | 1,464 Posts
Quoting mpathare
Disliked
@Seeking

I dont think I quite understand what you are trying to say.

In my hypothetical example you would have to earn 400 pips before you could increase your number of contracts to 6 from 5. So that means for the say 5-6 winning trades it takes you to make 400 pips you will be using less leverage and risking less of your capital for each successive trade untill you reach $1200. At which point you can increase your number of contracts to 6.

This is quite simillar to what Dial was talking about with the mini account so I dont understand how having a finer grain as you say helps?
Ignored
Hang tight mpathare,

The advantage of the finer granularity is difficult for many folks to grasp. I'm putting together a nice graphic that will visually illustrate the superiority of a micro over a mini. I'm working on it now, but it may be tomorrow night before I finish it. Bear with me please.
sxaxlxvxaxtxixoxnxbxyxgxrxaxcxexdxoxtxoxrxgx
 
 
  • Post #9
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  • Oct 11, 2006 12:48pm Oct 11, 2006 12:48pm
  •  twinchell
  • | Joined Apr 2006 | Status: Ousted Member | 540 Posts
Quoting TheRumpledOne
Disliked
I look forward to seeing your work.

Also, make sure traders know that they can get to 400 pips a lot faster if they do NOT used fixed spread brokers because there is NO FIXED SPREAD IN FOREX.
Ignored
Ok, so, you don't want us to use EFX Group, right?
 
 
  • Post #10
  • Quote
  • Oct 11, 2006 7:50pm Oct 11, 2006 7:50pm
  •  SeekingLight
  • Joined Jul 2006 | Status: Charts + PA > * | 3,251 Posts
Without wanting to take over smjones' job, or risk too much lip, but....

Why can't we restrict broker discussions to broker discussion threads?
All this constant "my broker cheated me" this, cheated me that, ECN is the only way to go (yes well they don't have micros there and the minimum account size is huge so no go if you're a small change guy & just dabbling, so there is no actual choice) etc pp is all good and well, but there is whole webpages and seperated forums dedicated to this (nondealingdesk blog at blogspot and at the dotcom) and seperate threads, so it would really be helpfull and especially feel a lot less like advertising or simply out of place if people could refrain from posting their price spike-pits, NFP burns, broker recommendations and so forth into any random discussion thread as opposed to those that were actually intended for the subject.
I hate to be this "pissy" about something, but lately it just feels it's going on everywhere and I find it's just out of place / off topic 99% of the time.
Especially since every post in that regard encourages additional counter-posts and so forth and things just end up getting tossed about even if unrelated to actual post topic.
Not everyone has a choice and those that do are free to educate themselves as this is the information age and there are numerous ways to do so. And if your broker cheats you, call them, threaten moving the account, if you don't get reimbursed or if they refuse then just move. Other people will gladly take your business. Life's problems are only as big as you make them to be.

The "fastest" way to getting 400 pips is being in a trade while the market moves 400 pips in your direction, the end. They don't magically come twice as fast or much just because your broker uses 5 instead of 1 pip spread. The market moves the same distance in the same amount of time. The cost for entering the trade might minimally differ, the actual movement of the market will not.

Help is appreciated always, but where appropiate please.

Also looking forward to Diallist's examples.
Trust price. Know yourself.
 
 
  • Post #11
  • Quote
  • Oct 11, 2006 11:26pm Oct 11, 2006 11:26pm
  •  diallist
  • Joined Sep 2004 | Status: Member | 1,464 Posts
Gee, all you folks looking forward to my example have made me nervous!

Well, the image attached below makes sense to me. I hope it does to you fine folks as well. But before I get started let me tell you how my broker ripped me off during the last NFP! You won't believe this but....

Sorry SeekingLight, I couldn't resist. Peace!

Hopefully the image below is self explanatory, but let me give an analogy that may be useful as well.

Two neighbors have just installed new swimming pools in their back yards.

Fred has a Mini pump that puts out 20 gallons per minute when first started, but that rate gradually drops to around 5 gallons a minute in the time it takes for the water level in the pool to rise 10 inches. At that point the Mini pump kicks back up tp 20 gallons per minute, and the process repeats until the pool is full. The average rate of pump output is 12.5 gallons per minute.

Joe, on the other hand, has a Micro pump that puts out 20 gallons per minute when first started, but that rate gradually drops to around 18 gallons a minute in the time it takes for the water level in the pool to rise 1 inch. At that point the Mini pump kicks back up tp 20 gallons per minute, and the process repeats until the pool is full. The average rate of pump output is 19 gallons per minute.

Whose pool get full first?
Attached Image
sxaxlxvxaxtxixoxnxbxyxgxrxaxcxexdxoxtxoxrxgx
 
 
  • Post #12
  • Quote
  • Oct 12, 2006 10:13am Oct 12, 2006 10:13am
  •  mpathare
  • | Joined Jun 2006 | Status: Great Googley Moogley! | 53 Posts
That picture really helped. Seeing it visually made it earier to understand. Seeking was trying to tell me the same thing but I didnt get it then.

Thanks you guys. The mods should copy Dials last post into the MM sticky.
 
 
  • Post #13
  • Quote
  • Oct 12, 2006 11:54am Oct 12, 2006 11:54am
  •  mpathare
  • | Joined Jun 2006 | Status: Great Googley Moogley! | 53 Posts
Well I guess i am still a little confused. I considered 2 accounts one micro and one mini using a hypothetical system where all trades placed would require 2% of the equity risked with a 40 pip SL and would always yeild a 100 pip profit. What I found is that it takes the same number of winning trades to increase the lot size. This is not what I was expecting. What am I doing wrong?


<table x:str="" style="border-collapse: collapse; width: 338pt;" border="0" cellpadding="0" cellspacing="0" width="450"><col style="width: 59pt;" width="78"> <col style="width: 35pt;" width="47"> <col style="width: 40pt;" width="53"> <col style="width: 38pt;" width="51"> <col style="width: 53pt;" width="70"> <col style="width: 35pt;" width="47"> <col style="width: 40pt;" width="53"> <col style="width: 38pt;" width="51"> <tbody><tr style="height: 15pt;" height="20"> <td class="xl24" style="height: 15pt; width: 59pt;" height="20" width="78">Micro Account</td> <td class="xl24" style="width: 35pt;" width="47">
</td> <td class="xl25" style="width: 40pt;" width="53">
</td> <td class="xl24" style="width: 38pt;" width="51">
</td> <td class="xl24" style="width: 53pt;" width="70">Mini Account</td> <td class="xl24" style="width: 35pt;" width="47">
</td> <td class="xl25" style="width: 40pt;" width="53">
</td> <td class="xl24" style="width: 38pt;" width="51">
</td> </tr> <tr style="height: 12pt;" height="16"> <td class="xl24" style="height: 12pt;" height="16">Total Equity</td> <td class="xl24">Lot Size</td> <td class="xl24">% Risked</td> <td class="xl24">Profit</td> <td class="xl24">Total Equity</td> <td class="xl24">Lot Size</td> <td class="xl24">% Risked</td> <td class="xl24">Profit</td> </tr> <tr style="height: 12pt;" height="16"> <td class="xl24" style="height: 12pt;" x:num="" align="right" height="16">1000.00</td> <td class="xl24" x:num="" align="right">5.00</td> <td class="xl24" x:num="" align="right">2.00</td> <td class="xl26" x:num="" align="right">50.00</td> <td class="xl24" x:num="" align="right">10000.00</td> <td class="xl24" x:num="" align="right">5.00</td> <td class="xl24" x:num="" align="right">2.00</td> <td class="xl24" x:num="" align="right">500.00</td> </tr> <tr style="height: 12pt;" height="16"> <td class="xl24" style="height: 12pt;" x:num="" align="right" height="16">1050.00</td> <td class="xl24" x:num="" align="right">5.00</td> <td class="xl24" x:num="" align="right">1.90</td> <td class="xl26" x:num="" align="right">50.00</td> <td class="xl24" x:num="" align="right">10500.00</td> <td class="xl24" x:num="" align="right">5.00</td> <td class="xl24" x:num="" align="right">1.90</td> <td class="xl24" x:num="" align="right">500.00</td> </tr> <tr style="height: 12pt;" height="16"> <td class="xl24" style="height: 12pt;" x:num="" align="right" height="16">1100.00</td> <td class="xl24" x:num="" align="right">5.00</td> <td class="xl26" x:num="" align="right">1.82</td> <td class="xl26" x:num="" align="right">50.00</td> <td class="xl24" x:num="" align="right">11000.00</td> <td class="xl24" x:num="" align="right">5.00</td> <td class="xl24" x:num="" align="right">1.82</td> <td class="xl24" x:num="" align="right">500.00</td> </tr> <tr style="height: 11.25pt;" height="15"> <td class="xl24" style="height: 11.25pt;" x:num="" align="right" height="15">1150.00</td> <td class="xl24" x:num="" align="right">5.00</td> <td class="xl24" x:num="" align="right">1.74</td> <td class="xl26" x:num="" align="right">50.00</td> <td class="xl24" x:num="" align="right">11500.00</td> <td class="xl24" x:num="" align="right">5.00</td> <td class="xl24" x:num="" align="right">1.74</td> <td class="xl24" x:num="" align="right">500.00</td> </tr> <tr style="height: 11.25pt;" height="15"> <td class="xl24" style="height: 11.25pt;" x:num="" align="right" height="15">1200.00</td> <td class="xl24" x:num="" align="right">6.00</td> <td class="xl24" x:num="" align="right">2.00</td> <td class="xl26" x:num="" align="right">60.00</td> <td class="xl24" x:num="" align="right">12000.00</td> <td class="xl24" x:num="" align="right">6.00</td> <td class="xl24" x:num="" align="right">2.00</td> <td class="xl24" x:num="" align="right">600.00</td> </tr> <tr style="height: 11.25pt;" height="15"> <td class="xl24" style="height: 11.25pt;" x:num="" align="right" height="15">1260.00</td> <td class="xl24" x:num="" align="right">6.00</td> <td class="xl24" x:num="" align="right">1.90</td> <td class="xl26" x:num="" align="right">60.00</td> <td class="xl24" x:num="" align="right">12600.00</td> <td class="xl24" x:num="" align="right">6.00</td> <td class="xl24" x:num="" align="right">1.90</td> <td class="xl24" x:num="" align="right">600.00</td> </tr> <tr style="height: 11.25pt;" height="15"> <td class="xl24" style="height: 11.25pt;" x:num="" align="right" height="15">1320.00</td> <td class="xl24" x:num="" align="right">6.00</td> <td class="xl24" x:num="" align="right">1.82</td> <td class="xl26" x:num="" align="right">60.00</td> <td class="xl24" x:num="" align="right">13200.00</td> <td class="xl24" x:num="" align="right">6.00</td> <td class="xl24" x:num="" align="right">1.82</td> <td class="xl24" x:num="" align="right">600.00</td> </tr> <tr style="height: 12pt;" height="16"> <td class="xl24" style="height: 12pt;" x:num="" align="right" height="16">1380.00</td> <td class="xl24" x:num="" align="right">6.00</td> <td class="xl24" x:num="" align="right">1.74</td> <td class="xl26" x:num="" align="right">60.00</td> <td class="xl24" x:num="" align="right">13800.00</td> <td class="xl24" x:num="" align="right">6.00</td> <td class="xl24" x:num="" align="right">1.74</td> <td class="xl24" x:num="" align="right">600.00</td> </tr> <tr style="height: 11.25pt;" height="15"> <td class="xl24" style="height: 11.25pt;" x:num="" align="right" height="15">1440.00</td> <td class="xl24" x:num="" align="right">7.00</td> <td class="xl24" x:num="" align="right">1.94</td> <td class="xl26" x:num="" align="right">70.00</td> <td class="xl24" x:num="" align="right">14400.00</td> <td class="xl24" x:num="" align="right">7.00</td> <td class="xl24" x:num="" align="right">1.94</td> <td class="xl24" x:num="" align="right">700.00</td> </tr> <tr style="height: 11.25pt;" height="15"> <td class="xl24" style="height: 11.25pt;" x:num="" align="right" height="15">1510.00</td> <td class="xl24" x:num="" align="right">7.00</td> <td class="xl24" x:num="" align="right">1.85</td> <td class="xl26" x:num="" align="right">70.00</td> <td class="xl24" x:num="" align="right">15100.00</td> <td class="xl24" x:num="" align="right">7.00</td> <td class="xl24" x:num="" align="right">1.85</td> <td class="xl24" x:num="" align="right">700.00</td> </tr> </tbody></table>
Sorry if the table is not to well formatted.
 
 
  • Post #14
  • Quote
  • Oct 12, 2006 1:24pm Oct 12, 2006 1:24pm
  •  diallist
  • Joined Sep 2004 | Status: Member | 1,464 Posts
Quoting mpathare
Disliked
Well I guess i am still a little confused. I considered 2 accounts one micro and one mini using a hypothetical system where all trades placed would require 2% of the equity risked with a 40 pip SL and would always yeild a 100 pip profit. What I found is that it takes the same number of winning trades to increase the lot size. This is not what I was expecting. What am I doing wrong?


<TABLE style="WIDTH: 338pt; BORDER-COLLAPSE: collapse" cellSpacing=0 cellPadding=0 width=450 border=0 x:str=""><COLGROUP><COL style="WIDTH: 59pt" width=78><COL style="WIDTH: 35pt" width=47><COL style="WIDTH: 40pt" width=53><COL style="WIDTH: 38pt" width=51><COL style="WIDTH: 53pt" width=70><COL style="WIDTH: 35pt" width=47><COL style="WIDTH: 40pt" width=53><COL style="WIDTH: 38pt" width=51><TBODY><TR style="HEIGHT: 15pt" height=20><TD class=xl24 style="WIDTH: 59pt; HEIGHT: 15pt" width=78 height=20>Micro Account</TD><TD class=xl24 style="WIDTH: 35pt" width=47>




</TD><TD class=xl25 style="WIDTH: 40pt" width=53>




</TD><TD class=xl24 style="WIDTH: 38pt" width=51>




</TD><TD class=xl24 style="WIDTH: 53pt" width=70>Mini Account</TD><TD class=xl24 style="WIDTH: 35pt" width=47>




</TD><TD class=xl25 style="WIDTH: 40pt" width=53>




</TD><TD class=xl24 style="WIDTH: 38pt" width=51>




</TD></TR><TR style="HEIGHT: 12pt" height=16><TD class=xl24 style="HEIGHT: 12pt" height=16>Total Equity</TD><TD class=xl24>Lot Size</TD><TD class=xl24>% Risked</TD><TD class=xl24>Profit</TD><TD class=xl24>Total Equity</TD><TD class=xl24>Lot Size</TD><TD class=xl24>% Risked</TD><TD class=xl24>Profit</TD></TR><TR style="HEIGHT: 12pt" height=16><TD class=xl24 style="HEIGHT: 12pt" align=right height=16 x:num="">1000.00</TD><TD class=xl24 align=right x:num="">5.00</TD><TD class=xl24 align=right x:num="">2.00</TD><TD class=xl26 align=right x:num="">50.00</TD><TD class=xl24 align=right x:num="">10000.00</TD><TD class=xl24 align=right x:num="">5.00</TD><TD class=xl24 align=right x:num="">2.00</TD><TD class=xl24 align=right x:num="">500.00</TD></TR><TR style="HEIGHT: 12pt" height=16><TD class=xl24 style="HEIGHT: 12pt" align=right height=16 x:num="">1050.00</TD><TD class=xl24 align=right x:num="">5.00</TD><TD class=xl24 align=right x:num="">1.90</TD><TD class=xl26 align=right x:num="">50.00</TD><TD class=xl24 align=right x:num="">10500.00</TD><TD class=xl24 align=right x:num="">5.00</TD><TD class=xl24 align=right x:num="">1.90</TD><TD class=xl24 align=right x:num="">500.00</TD></TR><TR style="HEIGHT: 12pt" height=16><TD class=xl24 style="HEIGHT: 12pt" align=right height=16 x:num="">1100.00</TD><TD class=xl24 align=right x:num="">5.00</TD><TD class=xl26 align=right x:num="">1.82</TD><TD class=xl26 align=right x:num="">50.00</TD><TD class=xl24 align=right x:num="">11000.00</TD><TD class=xl24 align=right x:num="">5.00</TD><TD class=xl24 align=right x:num="">1.82</TD><TD class=xl24 align=right x:num="">500.00</TD></TR><TR style="HEIGHT: 11.25pt" height=15><TD class=xl24 style="HEIGHT: 11.25pt" align=right height=15 x:num="">1150.00</TD><TD class=xl24 align=right x:num="">5.00</TD><TD class=xl24 align=right x:num="">1.74</TD><TD class=xl26 align=right x:num="">50.00</TD><TD class=xl24 align=right x:num="">11500.00</TD><TD class=xl24 align=right x:num="">5.00</TD><TD class=xl24 align=right x:num="">1.74</TD><TD class=xl24 align=right x:num="">500.00</TD></TR><TR style="HEIGHT: 11.25pt" height=15><TD class=xl24 style="HEIGHT: 11.25pt" align=right height=15 x:num="">1200.00</TD><TD class=xl24 align=right x:num="">6.00</TD><TD class=xl24 align=right x:num="">2.00</TD><TD class=xl26 align=right x:num="">60.00</TD><TD class=xl24 align=right x:num="">12000.00</TD><TD class=xl24 align=right x:num="">6.00</TD><TD class=xl24 align=right x:num="">2.00</TD><TD class=xl24 align=right x:num="">600.00</TD></TR><TR style="HEIGHT: 11.25pt" height=15><TD class=xl24 style="HEIGHT: 11.25pt" align=right height=15 x:num="">1260.00</TD><TD class=xl24 align=right x:num="">6.00</TD><TD class=xl24 align=right x:num="">1.90</TD><TD class=xl26 align=right x:num="">60.00</TD><TD class=xl24 align=right x:num="">12600.00</TD><TD class=xl24 align=right x:num="">6.00</TD><TD class=xl24 align=right x:num="">1.90</TD><TD class=xl24 align=right x:num="">600.00</TD></TR><TR style="HEIGHT: 11.25pt" height=15><TD class=xl24 style="HEIGHT: 11.25pt" align=right height=15 x:num="">1320.00</TD><TD class=xl24 align=right x:num="">6.00</TD><TD class=xl24 align=right x:num="">1.82</TD><TD class=xl26 align=right x:num="">60.00</TD><TD class=xl24 align=right x:num="">13200.00</TD><TD class=xl24 align=right x:num="">6.00</TD><TD class=xl24 align=right x:num="">1.82</TD><TD class=xl24 align=right x:num="">600.00</TD></TR><TR style="HEIGHT: 12pt" height=16><TD class=xl24 style="HEIGHT: 12pt" align=right height=16 x:num="">1380.00</TD><TD class=xl24 align=right x:num="">6.00</TD><TD class=xl24 align=right x:num="">1.74</TD><TD class=xl26 align=right x:num="">60.00</TD><TD class=xl24 align=right x:num="">13800.00</TD><TD class=xl24 align=right x:num="">6.00</TD><TD class=xl24 align=right x:num="">1.74</TD><TD class=xl24 align=right x:num="">600.00</TD></TR><TR style="HEIGHT: 11.25pt" height=15><TD class=xl24 style="HEIGHT: 11.25pt" align=right height=15 x:num="">1440.00</TD><TD class=xl24 align=right x:num="">7.00</TD><TD class=xl24 align=right x:num="">1.94</TD><TD class=xl26 align=right x:num="">70.00</TD><TD class=xl24 align=right x:num="">14400.00</TD><TD class=xl24 align=right x:num="">7.00</TD><TD class=xl24 align=right x:num="">1.94</TD><TD class=xl24 align=right x:num="">700.00</TD></TR><TR style="HEIGHT: 11.25pt" height=15><TD class=xl24 style="HEIGHT: 11.25pt" align=right height=15 x:num="">1510.00</TD><TD class=xl24 align=right x:num="">7.00</TD><TD class=xl24 align=right x:num="">1.85</TD><TD class=xl26 align=right x:num="">70.00</TD><TD class=xl24 align=right x:num="">15100.00</TD><TD class=xl24 align=right x:num="">7.00</TD><TD class=xl24 align=right x:num="">1.85</TD><TD class=xl24 align=right x:num="">700.00</TD></TR></TBODY></TABLE>
Sorry if the table is not to well formatted.
Ignored
Okay, this is just off the cuff without really thinking it through, but having the micro account with a starting balance of 1000, and a mini account with a starting balance of 10000 is going to make your results equivalent. Try your analysis again with the same starting balance for each (mini & micro). Let me know how it works out that way.

On a side note, how did you accomplish the spacing between the columns in your table? Whenever I try this, it always collapses to a single space.

Thanks

Dial
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  • Post #15
  • Quote
  • Oct 12, 2006 1:31pm Oct 12, 2006 1:31pm
  •  diallist
  • Joined Sep 2004 | Status: Member | 1,464 Posts
I just wanted to point out that the article in the beginner's forum on asymmetrical leverage was authored by fijitrader, not me. I just wanted to make sure credit goes to fiji.

Fiji is a true genius. If I were only a tenth as smart as him, I'd be brilliant!

Dial
sxaxlxvxaxtxixoxnxbxyxgxrxaxcxexdxoxtxoxrxgx
 
 
  • Post #16
  • Quote
  • Last Post: Oct 12, 2006 2:14pm Oct 12, 2006 2:14pm
  •  mpathare
  • | Joined Jun 2006 | Status: Great Googley Moogley! | 53 Posts
Ofcourse! my bad. The revised table looks much better. This time for both accounts I used a $2000 starting balance cause with a $1000 mini account you can only start with 0.5 lots with my MM method.

<table x:str="" style="border-collapse: collapse; width: 338pt;" border="0" cellpadding="0" cellspacing="0" width="450"><col style="width: 59pt;" width="78"> <col style="width: 35pt;" width="47"> <col style="width: 40pt;" width="53"> <col style="width: 38pt;" width="51"> <col style="width: 53pt;" width="70"> <col style="width: 35pt;" width="47"> <col style="width: 40pt;" width="53"> <col style="width: 38pt;" width="51"> <tbody><tr style="height: 12pt;" height="16"> <td class="xl24" style="height: 12pt; width: 59pt;" height="16" width="78">Total Equity</td> <td class="xl24" style="width: 35pt;" width="47">Lot Size</td> <td class="xl24" style="width: 40pt;" width="53">% Risked</td> <td class="xl24" style="width: 38pt;" width="51">Profit</td> <td class="xl24" style="width: 53pt;" width="70">Total Equity</td> <td class="xl24" style="width: 35pt;" width="47">Lot Size</td> <td class="xl24" style="width: 40pt;" width="53">% Risked</td> <td class="xl24" style="width: 38pt;" width="51">Profit</td> </tr> <tr style="height: 12pt;" height="16"> <td class="xl24" style="height: 12pt;" x:num="" align="right" height="16">2000.00</td> <td class="xl24" x:num="" align="right">10.00</td> <td class="xl24" x:num="" align="right">2.00</td> <td class="xl25" x:num="" align="right">100.00</td> <td class="xl24" x:num="" align="right">2000.00</td> <td class="xl24" x:num="" align="right">1.00</td> <td class="xl24" x:num="" align="right">2.00</td> <td class="xl24" x:num="" align="right">100.00</td> </tr> <tr style="height: 12pt;" height="16"> <td class="xl24" style="height: 12pt;" x:num="" align="right" height="16">2100.00</td> <td class="xl24" x:num="" align="right">10.00</td> <td class="xl24" x:num="" align="right">1.90</td> <td class="xl25" x:num="" align="right">100.00</td> <td class="xl24" x:num="" align="right">2100.00</td> <td class="xl24" x:num="" align="right">1.00</td> <td class="xl24" x:num="" align="right">1.90</td> <td class="xl24" x:num="" align="right">100.00</td> </tr> <tr style="height: 12pt;" height="16"> <td class="xl24" style="height: 12pt;" x:num="" align="right" height="16">2200.00</td> <td class="xl24" x:num="" align="right">11.00</td> <td class="xl25" x:num="" align="right">2.00</td> <td class="xl25" x:num="" align="right">110.00</td> <td class="xl24" x:num="" align="right">2200.00</td> <td class="xl24" x:num="" align="right">1.00</td> <td class="xl24" x:num="" align="right">1.82</td> <td class="xl24" x:num="" align="right">100.00</td> </tr> <tr style="height: 11.25pt;" height="15"> <td class="xl24" style="height: 11.25pt;" x:num="" align="right" height="15">2310.00</td> <td class="xl24" x:num="" align="right">11.00</td> <td class="xl24" x:num="" align="right">1.90</td> <td class="xl25" x:num="" align="right">110.00</td> <td class="xl24" x:num="" align="right">2300.00</td> <td class="xl24" x:num="" align="right">1.00</td> <td class="xl24" x:num="" align="right">1.74</td> <td class="xl24" x:num="" align="right">100.00</td> </tr> <tr style="height: 11.25pt;" height="15"> <td class="xl24" style="height: 11.25pt;" x:num="" align="right" height="15">2420.00</td> <td class="xl24" x:num="" align="right">12.00</td> <td class="xl24" x:num="" align="right">1.98</td> <td class="xl25" x:num="" align="right">120.00</td> <td class="xl24" x:num="" align="right">2400.00</td> <td class="xl24" x:num="" align="right">1.00</td> <td class="xl24" x:num="" align="right">1.67</td> <td class="xl24" x:num="" align="right">100.00</td> </tr> <tr style="height: 11.25pt;" height="15"> <td class="xl24" style="height: 11.25pt;" x:num="" align="right" height="15">2540.00</td> <td class="xl24" x:num="" align="right">12.00</td> <td class="xl24" x:num="" align="right">1.89</td> <td class="xl25" x:num="" align="right">120.00</td> <td class="xl24" x:num="" align="right">2500.00</td> <td class="xl24" x:num="" align="right">1.00</td> <td class="xl24" x:num="" align="right">1.60</td> <td class="xl24" x:num="" align="right">100.00</td> </tr> <tr style="height: 11.25pt;" height="15"> <td class="xl24" style="height: 11.25pt;" x:num="" align="right" height="15">2660.00</td> <td class="xl24" x:num="" align="right">13.00</td> <td class="xl24" x:num="" align="right">1.95</td> <td class="xl25" x:num="" align="right">130.00</td> <td class="xl24" x:num="" align="right">2600.00</td> <td class="xl24" x:num="" align="right">1.00</td> <td class="xl24" x:num="" align="right">1.54</td> <td class="xl24" x:num="" align="right">100.00</td> </tr> <tr style="height: 12pt;" height="16"> <td class="xl24" style="height: 12pt;" x:num="" align="right" height="16">2790.00</td> <td class="xl24" x:num="" align="right">13.00</td> <td class="xl24" x:num="" align="right">1.86</td> <td class="xl25" x:num="" align="right">130.00</td> <td class="xl24" x:num="" align="right">2700.00</td> <td class="xl24" x:num="" align="right">1.00</td> <td class="xl24" x:num="" align="right">1.48</td> <td class="xl24" x:num="" align="right">100.00</td> </tr> <tr style="height: 11.25pt;" height="15"> <td class="xl24" style="height: 11.25pt;" x:num="" align="right" height="15">2820.00</td> <td class="xl24" x:num="" align="right">14.00</td> <td class="xl24" x:num="" align="right">1.99</td> <td class="xl25" x:num="" align="right">140.00</td> <td class="xl24" x:num="" align="right">2800.00</td> <td class="xl24" x:num="" align="right">1.00</td> <td class="xl24" x:num="" align="right">1.43</td> <td class="xl24" x:num="" align="right">100.00</td> </tr> <tr style="height: 11.25pt;" height="15"> <td class="xl24" style="height: 11.25pt;" x:num="" align="right" height="15">2960.00</td> <td class="xl24" x:num="" align="right">14.00</td> <td class="xl24" x:num="" align="right">1.89</td> <td class="xl25" x:num="" align="right">140.00</td> <td class="xl24" x:num="" align="right">2900.00</td> <td class="xl24" x:num="" align="right">1.00</td> <td class="xl24" x:num="" align="right">1.38</td> <td class="xl24" x:num="" align="right">100.00</td> </tr> <tr style="height: 11.25pt;" height="15"> <td class="xl24" style="height: 11.25pt;" x:num="" align="right" height="15">3100.00</td> <td class="xl24" x:num="" align="right">15.00</td> <td class="xl24" x:num="" align="right">1.94</td> <td class="xl24" x:num="" align="right">150.00</td> <td class="xl24" x:num="" align="right">3000.00</td> <td class="xl24" x:num="" align="right">1.00</td> <td class="xl24" x:num="" align="right">1.33</td> <td class="xl24" x:num="" align="right">100.00</td> </tr> <tr style="height: 11.25pt;" height="15"> <td class="xl24" style="height: 11.25pt;" x:num="" align="right" height="15">3250.00</td> <td class="xl24" x:num="" align="right">16.00</td> <td class="xl24" x:num="" align="right">1.97</td> <td class="xl24" x:num="" align="right">160.00</td> <td class="xl24" x:num="" align="right">3100.00</td> <td class="xl24" x:num="" align="right">1.00</td> <td class="xl24" x:num="" align="right">1.29</td> <td class="xl24" x:num="" align="right">100.00</td> </tr> <tr style="height: 11.25pt;" height="15"> <td class="xl24" style="height: 11.25pt;" x:num="" align="right" height="15">3410.00</td> <td class="xl24" x:num="" align="right">17.00</td> <td class="xl24" x:num="" align="right">1.99</td> <td class="xl24" x:num="" align="right">170.00</td> <td class="xl24" x:num="" align="right">3200.00</td> <td class="xl24" x:num="" align="right">1.00</td> <td class="xl24" x:num="" align="right">1.25</td> <td class="xl24" x:num="" align="right">100.00</td> </tr> <tr style="height: 11.25pt;" height="15"> <td class="xl24" style="height: 11.25pt;" x:num="" align="right" height="15">3580.00</td> <td class="xl24" x:num="" align="right">17.00</td> <td class="xl24" x:num="" align="right">1.90</td> <td class="xl24" x:num="" align="right">170.00</td> <td class="xl24" x:num="" align="right">3300.00</td> <td class="xl24" x:num="" align="right">1.00</td> <td class="xl24" x:num="" align="right">1.21</td> <td class="xl24" x:num="" align="right">100.00</td> </tr> <tr style="height: 11.25pt;" height="15"> <td class="xl24" style="height: 11.25pt;" x:num="" align="right" height="15">3650.00</td> <td class="xl24" x:num="" align="right">18.00</td> <td class="xl24" x:num="" align="right">1.97</td> <td class="xl24" x:num="" align="right">180.00</td> <td class="xl24" x:num="" align="right">3400.00</td> <td class="xl24" x:num="" align="right">1.00</td> <td class="xl24" x:num="" align="right">1.18</td> <td class="xl24" x:num="" align="right">100.00</td> </tr> <tr style="height: 11.25pt;" height="15"> <td class="xl24" style="height: 11.25pt;" x:num="" align="right" height="15">3730.00</td> <td class="xl24" x:num="" align="right">18.00</td> <td class="xl24" x:num="" align="right">1.93</td> <td class="xl24" x:num="" align="right">180.00</td> <td class="xl24" x:num="" align="right">3500.00</td> <td class="xl24" x:num="" align="right">1.00</td> <td class="xl24" x:num="" align="right">1.14</td> <td class="xl24" x:num="" align="right">100.00</td> </tr> <tr style="height: 11.25pt;" height="15"> <td class="xl24" style="height: 11.25pt;" x:num="" align="right" height="15">3860.00</td> <td class="xl24" x:num="" align="right">19.00</td> <td class="xl24" x:num="" align="right">1.97</td> <td class="xl24" x:num="" align="right">190.00</td> <td class="xl24" x:num="" align="right">3600.00</td> <td class="xl24" x:num="" align="right">1.00</td> <td class="xl24" x:num="" align="right">1.11</td> <td class="xl24" x:num="" align="right">100.00</td> </tr> <tr style="height: 11.25pt;" height="15"> <td class="xl24" style="height: 11.25pt;" x:num="" align="right" height="15">4050.00</td> <td class="xl24" x:num="" align="right">20.00</td> <td class="xl24" x:num="" align="right">1.98</td> <td class="xl24" x:num="" align="right">200.00</td> <td class="xl24" x:num="" align="right">3700.00</td> <td class="xl24" x:num="" align="right">1.00</td> <td class="xl24" x:num="" align="right">1.08</td> <td class="xl24" x:num="" align="right">100.00</td> </tr> <tr style="height: 11.25pt;" height="15"> <td class="xl24" style="height: 11.25pt;" height="15">
</td> <td class="xl24">
</td> <td class="xl24">
</td> <td class="xl24">
</td> <td class="xl24" x:num="" align="right">3800.00</td> <td class="xl24" x:num="" align="right">1.00</td> <td class="xl24" x:num="" align="right">1.05</td> <td class="xl24" x:num="" align="right">100.00</td> </tr> <tr style="height: 11.25pt;" height="15"> <td class="xl24" style="height: 11.25pt;" height="15">
</td> <td class="xl24">
</td> <td class="xl24">
</td> <td class="xl24">
</td> <td class="xl24" x:num="" align="right">3900.00</td> <td class="xl24" x:num="" align="right">1.00</td> <td class="xl24" x:num="" align="right">1.03</td> <td class="xl24" x:num="" align="right">100.00</td> </tr> <tr style="height: 12pt;" height="16"> <td class="xl24" style="height: 12pt;" height="16">
</td> <td class="xl24">
</td> <td class="xl24">
</td> <td class="xl24">
</td> <td class="xl24" x:num="" align="right">4000.00</td> <td class="xl24" x:num="" align="right">2.00</td> <td class="xl24" x:num="" align="right">2.00</td> <td class="xl24" x:num="" align="right">200.00</td> </tr> </tbody></table>

It take a 3 less trades to get to $4000 using a micro account and the avarage %risked for the micro account is 1.94 as opposed to the 1.48 of the mini account.

Am I to understand that once the account has grown significantly then it would be better to move to a mini account? if so then what is usually considered the sweet spot? $10000? $30000? $50000?

Oh and the reason the spacing is the way it is is cause I pasted this from an Excel sheet. I guess if you try to paste something from Notepad or Wordpad all the extra spaces and tabs get removed.
 
 
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