casinoman wrote:Ah, you're right - forgot about the all-in. It is risk 100% to gain 4%.
Not exactly. It's "all-in", means you put on the largest position possible (BP). I will check; I believe BP affords you the 1% per tick that is needed. You would not let the position run against you 100%, or even 9% or 10% necessarily (I was wrong about stop size in my earlier post). You would put on a position equal to 100% of your buying power, to go "all-in". Optimal risk% yet to be determined..
Your calculation of 1.76% is also correct relative to a 4% win of 72 times or a 4% loss of 28 times.
My posting of 4% was based on risking 9 pips to net 4 pips with 72% wins and 28% loses.
(.72 * 4) - (.28 * 9) = 2.88 - 2.52 = .36 pip expectation
.36 pip expectation / 9 pips risked = 4% epectatation/yield
Since BP affords 1% per tick, we can use percentages when calculating expectations, instead of pips. This keeps everything on the same page.
Either way. It doesn't matter.
..I am confused that you say my calculation of 4% gain 72 times and 4% loss 28 times yields the 1.76% expectation, yet in your calculation you upped the loss% to 9% and came out with the higher 4% expectation.
If the expectation must be 4% and your maximum gain on any one trial is 4%, you need to win 100%. It doesn't matter what size your stop is. If x = stop size.
4x=0
