|
PureBytes Links
Trading Reference Links
|
:In this specific case:
:( .99^n/2 - 1 ) *100
:where n = total number of trades.
:Val.
:> Can anyone write me a formula for the following.
:> I have a system and the average WIN is 2X the average LOSS
:> The system WINS exactly 50% of the time
:> Let's say I start with $1M
:> Each time I trade, I risk 1% of the bankroll (starts at 1M then goes up
with each trade)
:> Can anyone write an algebraic formula that will determine the yearly
Rate-Of-Return depending on HOW :>MANY trades this system does each year?
Val,
Can you explain the formula? Is the .99 derived from (100% - 1%) risk of the
bankroll?
Is it raised to the power of n/2? And where did the 1 come from? Where does
the 50% of the percentage of winning trades fit in the formula? And the
ratio of wins to losses?
Andy
|