Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

BlueHorseshoe

Position Sizing or Diversification?

Recommended Posts

Just completed a back test on a simple code that reduced available trade equity by 30% next trade if previous trade failed to profit , also added to that, if the second closed trade back failed to produce a profit a further 30% reduction on available equity, from 20k to 14k less loss, lets say to 10k . the result without money management was 19k profit , test 1, 1 negative trade equity reduction resulted to 12k profit and test 2 - multi string loss reduction resulted in a 5k profit , not the way i thought, researching anti martingale. on the flip side , I added shares by 30% on a loss "martingale" , and produced almost 60k in the test. The martingale, similar to averaging down, is outside my donald trump budget and against my buying on the way down. A promising test came from a re invest code that took the equity allotted to that particular symbol and added the profit/loss and divided by the previous bar close verses straight 20k trades over the same period produce 2x the profits. bottom line will be testing the reinvest code over the next 30 days on the 9 xl spyders and will post the results in the traders log, One thought on profit preservation is to step aside when something doesnt add up as i will with the anti martingale for now. further reserch on anti martingale will contine outside of fixed fractional or volatility expansion, would be to add dynamics "push and feel" into the equity reduction.equation. I firmly believe in diversification, yet diversify on leading indicators within each sector. drilldown is the term. cheers

Share this post


Link to post
Share on other sites
Suppose you have a limited amount of capital and trade one contract in one market. You're a good trader, and after a certain amount of time you have doubled the account. What's the best thing to do next . . .

 

  1. Increase your position size and trade two contracts?
     
  2. Diversify by trading a single contract in a second market and continuing to trade a single contract in the orignal market?

In other words, if you don't have the luxury of a portfolio sized account to begin with, how do you subsequently reconcile the allocation of capital to secondary markets with position sizing in the first?

 

BlueHorseshoe

 

I'll go with diversification for i'll be giving me even lower risk on a single trade/contract...Risk reduction is the main priority for me, increasing the amount gained from winners comes later.....

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • Date : 21st November 2019. Equities continue lower ahead of ECB – 21st November 2019.Equities continue lower ahead of ECB – Stock markets head south on trade deal doubts, while a risk-off, or at least a risk-wary sentiment looks likely to prevail, which could keep safe-haven currencies, primarily the JPY and USD, underpinned, The high beta currencies such as the Dollar bloc and many developing-world currencies are under pressure.Always trade with strict risk management. Your capital is the single most important aspect of your trading business.Please note that times displayed based on local time zone and are from time of writing this report.Click HERE to access the full HotForex Economic calendar.Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!Click HERE to READ more Market news. Andria Pichidi Market Analyst HotForex Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • I keep getting a "connection refused" error when I try to use https with any link on your site.   but http works ok.   Is there any reason for this?     I also have two other tickets here and here that never got any replies.   Can you see them?  
    • EA in my opinion are coded to follow the technical analysis so they might require monitoring during the highly volatile markets, so anyone who wishes to go automated should read EA manuals before implementing them.
    • So here is the good news to surprise us again, i will try my luck in this VIP contest and let see what new opportunities i will be able to unleash this time.
    • So we are near to holidays now, Q4 is also gonna end soon and we will be preparing to make new plans for the upcoming new year.
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.