kate682 wrote:Hi MO, and everyone.
This is my understanding, about the initial rationale. (I need to put things into simplicity in order to work them through) Would appreciate someone letting me know whether I've got it right.
SpaceWars:
Ignition:-
Example. Account size $1000, risk 1.5% = $12, Pincushion box size is 30 pips, giving $.40/pip size.
My simple pincushion rationale is that I am potentially paying $12 for my space.
If I close $.20 of my position, my space becomes 60, if I add $.40, my space becomes 15?
Regards
Kate
1.5% of $1000 is $15. 15 over 30 is $0.50.
If each lot is $0.10 then you would buy 5 lots, if $0.15 then 3 lots, & if $0.08 then 6 lots. (1 / .8) * 5 = 6, (1 / 1.5) * 5 = 3
The other option is to buy as if each lot were $0.10 and reduce/expand space by multiplying space instead of lots:
(1 / 1.5) * 30 = 20.0 space
(1 / 0.8) * 30 = 37.5 space
The formula for space is (startingSize / endingSize) * space
You have 4 units and reduce to 2: 4/2 * 30 = 60
You have 2 units and increase to 6: 2/6 * 60 = 20
Your unit size is 6 & your space is 20.