gawdib
27th December 2003, 11:53 PM
on page 292-8 of his most pop book TYWTFF, he refers to , among things, position sizing according to how one defines how one's money is being risked. In some examples, he used an arbitrary percent of one's total money to invest: 1 way= a fixed percent and that is all... example 50000 x 5 %+2500. So with a 100$ stock one will buy 25 shares, putting in $2,500, of course.
2. a fixed percent, modified by a calculation that essentially syas. well, we are not really risking what we put into the "stock", but rather what our stop loss says we are risking, then calculates the number of stock units to buy.
so with that 100 dollar stock and 2500 dollars and a 10% stop loss then we can buy 250 stock units x 100$ stock price x .10 = 2500 "dollars risked" (but we actually put in 25,000 dollars, of course, .
3. aa fixed amount ,modified by a volatility calculation from each stock/investment vehicle. thus instead of the .10 in the above formula we would put a calculation related to a volatility measure such as atr(20). so let us say that this 100 stock had an atr(20) of 3... .03 x the stock price . then let us say that we will use a arbitrary figure 3 times the volatility. thus, the calculations: 275 shares x 100 stock price x( 3 x .03 percent volatility)= 2500 , to buy this of coarse =$ 27,500, on margin?.
Anyway, that is sort of the idea. Iis there some way in tradesim to make these types of choices. there seem to a choices but i cannot be sure i understand what choices are being allowed vis a vis the above sorts of ideas, yet i did read the material more than once slowly. sorry to be so dense. regards geoffrey
2. a fixed percent, modified by a calculation that essentially syas. well, we are not really risking what we put into the "stock", but rather what our stop loss says we are risking, then calculates the number of stock units to buy.
so with that 100 dollar stock and 2500 dollars and a 10% stop loss then we can buy 250 stock units x 100$ stock price x .10 = 2500 "dollars risked" (but we actually put in 25,000 dollars, of course, .
3. aa fixed amount ,modified by a volatility calculation from each stock/investment vehicle. thus instead of the .10 in the above formula we would put a calculation related to a volatility measure such as atr(20). so let us say that this 100 stock had an atr(20) of 3... .03 x the stock price . then let us say that we will use a arbitrary figure 3 times the volatility. thus, the calculations: 275 shares x 100 stock price x( 3 x .03 percent volatility)= 2500 , to buy this of coarse =$ 27,500, on margin?.
Anyway, that is sort of the idea. Iis there some way in tradesim to make these types of choices. there seem to a choices but i cannot be sure i understand what choices are being allowed vis a vis the above sorts of ideas, yet i did read the material more than once slowly. sorry to be so dense. regards geoffrey