Ok, here's the image (minus the charts) from the site after tonight's update. I'll use this to go over the calculations for the order sizing.
Starting from the top, the projected month starting and ending positions are just from the projection table on the explanation page of the site. The "Projected Position Size Today" is just interpolated from those (it's approximate because I actually subtract the starting date from today's date in Excel and assume a 30 day month). So 14/30 of the way from 11484 to 12701 is 12052.
Next comes the key formula which reflects my contrarian view of long term forex markets. There are powerful fundamental business, economic and political forces which tend to react against strong moves in one direction, so eventually we get a top or bottom.
So remembering that "Deposit" just really means cash in the account, today's (D/E)*P - A result is:
(2049.99/2151.07)*12052 - 10560 = (95.3%)*12052 - 10560 = 926.
The explanation of why I set it up like this is on the site, but basically since my equity is greater than my cash (D/E < 1) I'm in profit, and would prefer to have a lighter position than my projection. Specifically today my target is to have only about 95.3% of my projected position, but I actually have even less than that (since a bunch of liquidation orders filled today). So I'm still short 926. Now to the question of how I allocate this 926 among the various positions.
First of all, I set up target allocations for each pair based on the interest rate returns. The sum of all three rates is 16.15%, and USD/HUF for example contributes 5.15% of that or 32% of the total.
Now I just use the (D/E)*P - A formula for each position, but to get the projected position size I use the target allocation percentage we just calculated. So let's do the order size for USD/HUF as an example.
P: The projected position size is (5.15/16.15)*12052 = 3843
Now since the Deposit (cash balance) and Equity are "Actual" type numbers, I use the actual allocations for their adjustment factors. I have 3370 USD/HUF out of a total of 10560 in total positions, so:
D: The portion of my total Deposit (cash balance) that I "allocate" to USD/HUF is:
(3370/10560)*2049.99 = 654
E: The portion of my total Equity that I "allocate" to USD/HUF is:
(3370/10560)*2151.07 = 686
A: My actual position is 3370.
So my order is (D/E)*P - A which is:
(654/686)*3843 - 3370 = 293
But I'm not building a Swiss watch, so I round everything to 10 units so it's 290. A positive number means an increase in my position, so this is a SELL of 290 to increase my short USD/HUF.
OK! It's tuna melt and New England clam chowder time for me!!!
Attached Image
Starting from the top, the projected month starting and ending positions are just from the projection table on the explanation page of the site. The "Projected Position Size Today" is just interpolated from those (it's approximate because I actually subtract the starting date from today's date in Excel and assume a 30 day month). So 14/30 of the way from 11484 to 12701 is 12052.
Next comes the key formula which reflects my contrarian view of long term forex markets. There are powerful fundamental business, economic and political forces which tend to react against strong moves in one direction, so eventually we get a top or bottom.
So remembering that "Deposit" just really means cash in the account, today's (D/E)*P - A result is:
(2049.99/2151.07)*12052 - 10560 = (95.3%)*12052 - 10560 = 926.
The explanation of why I set it up like this is on the site, but basically since my equity is greater than my cash (D/E < 1) I'm in profit, and would prefer to have a lighter position than my projection. Specifically today my target is to have only about 95.3% of my projected position, but I actually have even less than that (since a bunch of liquidation orders filled today). So I'm still short 926. Now to the question of how I allocate this 926 among the various positions.
First of all, I set up target allocations for each pair based on the interest rate returns. The sum of all three rates is 16.15%, and USD/HUF for example contributes 5.15% of that or 32% of the total.
Now I just use the (D/E)*P - A formula for each position, but to get the projected position size I use the target allocation percentage we just calculated. So let's do the order size for USD/HUF as an example.
P: The projected position size is (5.15/16.15)*12052 = 3843
Now since the Deposit (cash balance) and Equity are "Actual" type numbers, I use the actual allocations for their adjustment factors. I have 3370 USD/HUF out of a total of 10560 in total positions, so:
D: The portion of my total Deposit (cash balance) that I "allocate" to USD/HUF is:
(3370/10560)*2049.99 = 654
E: The portion of my total Equity that I "allocate" to USD/HUF is:
(3370/10560)*2151.07 = 686
A: My actual position is 3370.
So my order is (D/E)*P - A which is:
(654/686)*3843 - 3370 = 293
But I'm not building a Swiss watch, so I round everything to 10 units so it's 290. A positive number means an increase in my position, so this is a SELL of 290 to increase my short USD/HUF.
OK! It's tuna melt and New England clam chowder time for me!!!