Magic of compounding
just watched it, really good...i actually use mirus myself and this is one of many great seminars.
i would love to use 10% fixed fractional but don't feel its realistic due to volatility and the mindset required. They all had advantages and disadvantages but i guess the optimal f and 5 fixed fractional are the postion sizing techniques i will take from this webinar so thanks for posting it.
What are your views are the postion sizing techniques he discussed? as he never really recommended any particular type?
jayjay
I am currently using the position size code provided by Grey1 and Glenn.
I have posted the ELA text below for convenience. I would say that this falls under the Constant Volatility section of Fixed Equity position sizing.
Like you I am attracted to the Optimal F and I daresay that there is code on the Tradestation site based around this concept. I would say that the speaker did more or less recommend a Fractional F approach - fractional F being a fraction of optimal F. His last slides on the Magic of compounding clearly showed their 10% fixed fractional as a very feasible technique.
Perhaps if I mention that this slide illustrated a starting amount of $10,000 providing a total return of $1,632,408 after 4 years it will get members rushing to view the presentation
Anyway it's something that warrants further investigation.
Charlton
[LegacyColorValue = true];
{Calculates position size based upon Fixed Percentage (1% of Capital) Money Management stop-loss
Capital = X, Fixed Percentage = X/100.
Say Capital = $120,000 based on 4x margin allowed, and FIxed Percentage = 1
Money Management Stop = $120,000 *( 1/ 100) = $1200.
Use the ATR(14) in each timeframe to calculate the Position size:-
e.g.
10 minute ATR(14) = $1.00
Position Size = MM Stop / ATR = $1200 / 1.00 = 1200 shares.
******* For Day-trading or Scalping using 10 min INDU cycle, set the Data Compression of this indicator to 10 minutes.
******* For Swing Trading, set the Data Comperssion to Daily}
Inputs:
Capital(0), {e.g. 120000 means $120,000}
FixedPercent(0), {e.g. 1 means 1 percent}
BASKET(0), {e.g. 3 means calculate position size assuming that you are taking 3 positions at once}
MaximumShares(0); {e.g. 1200 Shares.This is to ensure that non-volatile (Low ATR)stocks are not used for Scalping or Day-Trading.
Position Size will show 0 (zero)and Magenta backgound if the calculated Size is greater than the MaxShares}
Variables:
MMStop(0),
PSize(0);
MMStop = (Capital * (FixedPercent/100))/(BASKET);
Psize = (MMStop / (AvgTrueRange(14)));
If Psize <= Maximumshares then begin
Plot1(Psize,"Size");
Setplotbgcolor(1,black);
End;
If Psize > MaximumShares then begin
Psize = 0;
Setplotbgcolor(1,magenta);
Plot1(Psize,"Size");
end;
Value1 = Ticks ; { Force RadarScreen to update every tick. }
