Hi All,
It seems to me that there should be several factors that would be factored in, to determine true leverage. A trader with larger gains and few losses should not operate at the same levels as a trader with few and smaller gains (examples follow).
Trader "A" has an average gain of 10 pips and an average loss of 5 and wins 60% of the time.
Trader "B" has an average gain of 30 pips and an average loss of 10 and wins 85% of the time.
Trader "B" can afford to take greater risks than trader "A".
Is there any known formula that can help guide a more reasonable use of capital and fine tune the true leverage amount?
Thanks in advance
BR
It seems to me that there should be several factors that would be factored in, to determine true leverage. A trader with larger gains and few losses should not operate at the same levels as a trader with few and smaller gains (examples follow).
Trader "A" has an average gain of 10 pips and an average loss of 5 and wins 60% of the time.
Trader "B" has an average gain of 30 pips and an average loss of 10 and wins 85% of the time.
Trader "B" can afford to take greater risks than trader "A".
Is there any known formula that can help guide a more reasonable use of capital and fine tune the true leverage amount?
Thanks in advance
BR