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peteuk · 29-07-2003, 13:35

[quote]Originally posted by gazelle
6:1 = 90000USD position
5 consecutive losing trades @ 25 points 250.00USD
will leave you with 14000.00 1000.00USD loss
.066% loss

Maybe my calculator's broken, but 5 x 25 x $9 = $1125, which equates to 7.5% of your equity.

= 90000USD position
10 consecutive loosing trades @ 25 points 250.00USD
will leave you with 12750.00 2250.00USD loss
.15% loss

Twice as many losing trades as your above example = twice the loss = $2250, which equates to 15% of your equity.

increase the margin 10:1 = 150000.00USD position
5 consecutive losing trades @ 25 points 250.00USD
etc etc , same as above - does your dollar risk remain the same even though you have increased your margin , you could still have 5 consecutive loosing trades and loose the same amount even though your leveraged has increased - is this right

No, because the deal size has increased and so the value per pip has increased, it's now $15 a pip and not $9 a pip, therefore 5 x 25 x $15 = $1875, which equates to 12.5% of your equity.

Just seen your last post, trading strategies need to be backtested for a bit longer than 100 trades, more like a couple years! There's charting software that does the job for you on historic data, but what I know about it could be written on the back of a stamp! There was a backtesting thread somewhere on this forum, try the search box?

29-07-2003, 13:35	#5 (permalink)
peteuk level 3 Join Date: Mar 2003 Posts: 581 Rep Power: 0	[quote]Originally posted by gazelle 6:1 = 90000USD position 5 consecutive losing trades @ 25 points 250.00USD will leave you with 14000.00 1000.00USD loss .066% loss Maybe my calculator's broken, but 5 x 25 x $9 = $1125, which equates to 7.5% of your equity. = 90000USD position 10 consecutive loosing trades @ 25 points 250.00USD will leave you with 12750.00 2250.00USD loss .15% loss Twice as many losing trades as your above example = twice the loss = $2250, which equates to 15% of your equity. increase the margin 10:1 = 150000.00USD position 5 consecutive losing trades @ 25 points 250.00USD etc etc , same as above - does your dollar risk remain the same even though you have increased your margin , you could still have 5 consecutive loosing trades and loose the same amount even though your leveraged has increased - is this right No, because the deal size has increased and so the value per pip has increased, it's now $15 a pip and not $9 a pip, therefore 5 x 25 x $15 = $1875, which equates to 12.5% of your equity. Just seen your last post, trading strategies need to be backtested for a bit longer than 100 trades, more like a couple years! There's charting software that does the job for you on historic data, but what I know about it could be written on the back of a stamp! There was a backtesting thread somewhere on this forum, try the search box? Last edited by peteuk; 29-07-2003 at 13:50.