Hi,
I'm a newbie and just doing some research. I was reading an article where a group analyzed a set of 10 personal day trading strategies and all but 2 were expected to win in the long run. I'm just not sure how to determine this.
What I'm trying to figure out how to calculate a successful strategy in theory based on R/R factor, # of trades, Trading success rate less commissions and margin interestetc. I want to play with the varialbe numbers (R/R factor, success rate, etc., margin factor) and see what possible long term potential I can achieve with a starting balance of $10,000 and using a margin account. I think I know all the variables, I'm just not sure how to come up with the equation.
For example,
Starting Balance - $10,000
Risk/Reward - 1:2
Success Rate - 55% successful trades
margin leverage: 50:1
Margin interest: %5
Number of Trades: 100
Trading Fees: $8 round trip
Can anyone help me put together such an equation, I think this would be vary helpful in analyzing a basic long-term strategy or am I missing something. Thanks
Luke
I'm a newbie and just doing some research. I was reading an article where a group analyzed a set of 10 personal day trading strategies and all but 2 were expected to win in the long run. I'm just not sure how to determine this.
What I'm trying to figure out how to calculate a successful strategy in theory based on R/R factor, # of trades, Trading success rate less commissions and margin interestetc. I want to play with the varialbe numbers (R/R factor, success rate, etc., margin factor) and see what possible long term potential I can achieve with a starting balance of $10,000 and using a margin account. I think I know all the variables, I'm just not sure how to come up with the equation.
For example,
Starting Balance - $10,000
Risk/Reward - 1:2
Success Rate - 55% successful trades
margin leverage: 50:1
Margin interest: %5
Number of Trades: 100
Trading Fees: $8 round trip
Can anyone help me put together such an equation, I think this would be vary helpful in analyzing a basic long-term strategy or am I missing something. Thanks
Luke