Hi,
Is it possible to determind what will be the capital after executing these trade data ? Is there any software which could help ?
initial capital = 10k
No of trades = 100
Win = 60
Loss=40
Risk/Reward= 1:2
Risk/trade=.5%
Probably a calculator and a piece of paper would work. Or an Excel spreadsheet if you’re tech-savvy.
What is the formula ?
please note … I have asked for absolute capital value after executing this trade data…hope , you have understood the query properly.
10k *.5% is $50 per risk (loss.) $100 per win (1:2.) Out of 100 trades 60 * $100 is $6000 and 40 losses is minus $4000, so $2000 gain is 33% increase and ($2000 / 100 trades) $20 per trade.
If you have 32 opportunities a week, that is 32 * $20, or $640 a week. Not bad.
Hey, I gotta go to work. Have a great day!
Assuming that every trade is exited at either the TP (earning 1%), or at the SL (losing 0.5%), then —
$10,000 [1.01^60][0.995^40] = $14,866
Thanks Clint.
hmm…48% return /[B] year[/B]
looks like poor performance … top mutual fund companies return more than 100% /year
I don’t know where you got that figure.
Here are the latest rankings from [I]BarclayHedge[/I] (source: [I]Currency Trader[/I] magazine, October 2014, p.15)
[U]BarclayHedge Rankings[/U]
[B]Top 10 currency traders managing more than $10 million (based on August 2014 returns)[/B]
[B]Ranked according to 2014 YTD returns[/B]
[B]1[/B] - First Quadrant (TCA L/S USD 20%) — [B]21.37% YTD[/B] — $60,000,000 under management
[B]2[/B] - 24FX Global Advisors — [B]19.24% YTD[/B] — $73,600,000 under management
[B]3[/B] - Quantica Capl (Diversified FX) — [B]12.67% YTD[/B] — $77,000,000 under management
[B]4[/B] - P/E Investments (FX Aggressive) — [B]9.84% YTD[/B] — $3,400,000,000 under management
[B]5[/B] - Mifte Capital (FX Alpha) — [B]7.18% YTD[/B] — $42,800,000 under management
[B]6[/B] - P/E Investments (FX Standard) — [B]6.58% YTD[/B] — $3,400,000,000 under management
[B]7[/B] - Cambridge Strategy (Emerging Mkts) — [B]4.67% YTD[/B] — $567,000,000 under management
[B]8[/B] - LCJ FX Fund Strategy — [B]4.54% YTD[/B] — $139,500,000 under management
[B]9[/B] - Rhicon Currency Mgmt (Strategic) — B YTD[/B] — $290,000,000 under management
[B]10[/B] - Gables Capital Mgmt (Global FX) — B YTD[/B] — $56,000,000 under management
Note: The table published in the [I]Currency Trader[/I] magazine ranked these funds in order [I]according to their August 2014 returns.[/I] I have deleted the one-month (August) returns, and rearranged the order to show the [I]YTD results[/I] for the currency hedge funds which performed best in August.
It’s possible that a large ($10M+) fund, with dismal results in August, did not make this Top 10 list (for August), but nevertheless has a better [I]YTD[/I] performance than the funds shown — but, I doubt it.
If the YTD performance of the #1 fund on this list (21.37%) is sustained through the end of the year, their 2014 total annual return will print as 33.71% — a long way from your 100% figure.
If you can place 100 trades per year with a 60% win-ratio, and consistently earn 2R on 0.5% risk —
— then you should be able to do the same trades with 1% risk.
If you do that, then the formula will change to — [B]$10,000[1.02^60][0.99^40] = $21,949[/B]
— and you will beat the 100% ROI of your hypothetical hedge fund.
Hi
could you pls explain
Assuming that every trade is exited at either the TP (earning 1%), or at the SL (losing 0.5%), then —
$10,000 [1.01^60][0.995^40] = $14,866
I’m not sure what part of that post you want me to explain.
So, I’ll break it into two parts, and try to clarify it for you.
The OP’s (original poster’s) question implied that 100 trades would be made, of which 60 trades would yield a profit of 1% of current capital (current account balance), and 40 trades would result in a loss of 0.5% of current capital.
Because it’s possible (and usual) for a trader to intervene in his own trades (sometimes wisely and sometimes unwisely), changing the point at which certain trades are closed, in real-world circumstances, it happens often that trades are closed at prices other than the originally-intended take-profit (TP) or the pre-set stop-loss (SL).
My statement, quoted above, simply says that such interventions in open trades will be excluded from the calculation, and we shall assume that every trade will run until it reaches either the intended TP, or the predetermined SL. In other words, every trade will result in EITHER a profit of 1% of current capital, or a loss of 0.5% of current capital.
This formula says that the result of 60 trades, each generating a profit of 1% of capital, together with 40 trades, each producing a loss of 0.5% of capital, will increase the starting balance of $10,000, yielding an ending balance of $14,866.
If the notation used in the formula is confusing you, here’s an explanation.
• I assume you understand that 3 terms on the left side of the equation are being multiplied together —
[B]$10,000[/B] x [B][1.01^60][/B] x [B][0.995^40][/B]
• [B][1.01^60][/B] is mathematical notation for [B]1.01 raised to the power of 60.[/B]
In other words, it’s 1.01 x 1.01 x 1.01 x … [B]until 1.01 has been multiplied by itself 59 times. [/B]
Each multiplication by 1.01 represents an increase of 1% in the left side of the equation. The result of this multiplication is 1.816697 (rounded off).
• Likewise, [B][0.995^40][/B] is mathematical notation for [B]0.995 raised to the power of 40.[/B]
In other words, it’s 0.995 x 0.995 x 0.995 x … [B]until 0.995 has been multiplied by itself 39 times.[/B]
Each multiplication by 0.995 represents a decrease of 0.5% in the left side of the equation. The result of this multiplication is 0.818320 (rounded off).
So, the formula could be written in an expanded form, as follows:
$10,000 [1.01^60][0.995^40] = final balance
$10,000 [1.816697][0.818320] = final balance = $14,866 (rounded off)
Thanks Million for FX Men Honorary Member.
I really appreciate for very good explanation
because i loss more money real account and pamm account
i am learning now demo account but more people earn by pamm account.
I will try my best,
I can I will be a millonare soon.
if you dont mind could you pls advise enything
i learning eur/usd
Beatiful numbers but they save their attractiveness only on paper. In most cases traders just slide down the plan because of other circumstances like greed, fear, lazyness, etc…