Saturday, November 4, 2006

Strike & Stop loss calculator

I saw this message posted on Smell the Cheese group by YAGNESH N DESAI y...@hzw.ltindia.com

I thought of making one study, where in a hypothetical investor
performs the trade using a decision making tool (
Strike & Stop
Loss
).


Here I have defined few things 1. Strike rate : number of profitable decision to total number of decision. 2. Stop Loss : Avg % of investment lost while decision goes wrong (Assumed 5%) 3. Avg Profit : Avg % of profit earned while decision goes right. (Assumed 10%)

I have tried few cases where initial investment is 10000/- strike rate
is 1 of 4, 1 of 3, 1 of 2, 2 of 3 and 3 of 4 and last case is that the investor learns few tricks and then he matures so that his strike rate improves.

The results are as under after 56 trades: 1 of 4 10000 becomes 4404 , 1 of 3 10000 becomes 9167, 1 of 2 10000 becomes 34297, 2 of 3 10000 becomes 128315, 3 of 4 10000 becomes 267069, Maturing investor makes 34297 You can play with attached files to simulate different conditions.

Cool, isn't it!!



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