Help Need Calculating Expectancy and R:R

[DougStewart]

Hello DougStewart,

Hijack my threads anytime you like.

For position, in my opinion, i would start with 1 contract to make sure your trading method works and can produce consistent money for about a year or longer or shorter.

Once you double your money with 1 contract. Take that money put in the bank. Then repeat again with one contract. Once you double your money again, then go to 2 contracts. Double your money again , then go to 3 contracts. Double your money with 3 contracts then go to 4 contracts.

To me, this just makes things simple and simple goals.

So if you have $5000 to invest, start with 1 contract, make, $10k. Put 5k in bank. Then get account to $10k again. Then trade 2 contracts. If your account get back to $5k, go back to 1 contract.

Does this make sense? Atleast this how I see it, but I like things easy.

Thanks for the specific thoughtful and clear reply Simple! Easy to understand and replicate. For me, without experience, seems over-prudent. I hope to achieve faster compounding. Also, I would prefer not to take $ out of the account (except to pay taxes, grrrr!). We'll see how I do...

 

[SimpleMeLike]

Thanks for the specific thoughtful and clear reply Simple! Easy to understand and replicate. For me, without experience, seems over-prudent. I hope to achieve faster compounding. Also, I would prefer not to take $ out of the account (except to pay taxes, grrrr!). We'll see how I do...

You're welcome DougStewart,

Well, from my screen name you see Simple. I love simplicity. And from my simple thinking and many lessons learned I have experienced, starting with 1 contract makes alot of sense. Why risk more money on something they may not work?

The only issues with trading 1 contract I experienced was:

1. Deciding profit targets (exit strategy) can be a challenge based on how you trade with 1 contract. For example, there are 1. trailing a winner exit strategy 2. set profit target exit strategy

Even I struggle with my own exit strategy, and it really depends on strategy. Its a different subject all together.

 

[DougStewart]

If one does a Google search for " Van Tharp Definitive Guide to Position Sizing " , one of the results appears to be a link in Chinese for a .pdf version of the $256 book. The file doesn't appear to have any viruses either.