I will reply while I have a minute:
50K Account
2% risk = 1k
1K = 10pts
4 contracts commission = .2 pts
Point risk = 10-.2 = 9.8
1) Let x = value of
SD in ticks
Loss at 1sd below
VWAP for long:
9.8 points = 1 * 3x + 1 * 2x + 2*x
ANSWER to #1
x = 1.4pts or $140 risk/contract/SD
2) Exit at breakeven + 1 tick
What is total loss at
VWAP?
2nd
SD entry = -2x = -2.8pts
1st
SD entry = -1x = -1.4pts
VWAP = 2(0) = 0 pts down
Now you have 4 contracts and you are down 4.2pts
add in .2pts for commission to get be pt total = 4.4pts
Let x = the number of pts you need to get to b/e
4x = 4.4
x = 1.1points above
VWAP to b/e on 4 contracts
An exit 1 tick above b/e would give you .1 pts on all 4
so .4 points = $40
Hopefully that is correct, so it needed to move less than
1
SD for you to b/e.
SD is 1.4 pts and b/e + 1 was 1.2 points.
Jerry, I really am learning alot. Totally different from all the books
courses, systems and everything I have been taught. Very interesting. Although I am still in a quandry as I realize now that I can't follow along without having
PVP on my charts. On that side it is a little discouraging as I am really short on time to develop a volume distribution indicator at this time.
One thing I like...it allows you to profit in 2 out of 3 scenarios:
1) The market moves your direction right away
Dont make as much money as you have 25% of a position on
relative to a loss where you have 4 contracts on
2) The market moves against you (1 or 2
SD's)
You make money and you could have 50% to 100% of position on
3) The market moves to opposite side of
SD and you get stopped
And it really hurts because you lose on average alot more than
you make when you are correct
I love your ideas you are presenting but it seems the risk reward in my terms that I am used to thinking about will really hurt when you do get stopped out.
Thanks for sharing a new way to approach the markets,
dbntina
