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Risk Today value at bottom of Alveo app

 

Risk Today value at bottom of Alveo app

Want to confirm that my understanding of the Risk Today figure is correct. 
When we are loosing money the Risk Today figure at the bottom of the app turns red and shows a value such as -2.00% and if in profit a green figure such as 0.75%.  i.e. 2% of the account balance was lost or  0.75% of account balance was added to the account (including unrealised amounts)?
If I end the day with a positive value of say 0.50% and have only been trading lots of size 0.01, does it mean that had I done the same trades (and didn't exceed allowed tolerences), but with lots of size 1.00, that Risk Today figure would be 50.00% ? i.e. the account balance would have increased by 50% that day?

Tue, 08/18/2015 - 2:22pm
 
hakchinoy

"If I end the day with a positive value of say 0.50% and have only been trading lots of size 0.01, does it mean that had I done the same trades (and didn't exceed allowed tolerences), but with lots of size 1.00, that Risk Today figure would be 50.00%?"

Correct.

Please keep in mind that 1 micro lot = 1K (of the base currency); similarly, 1 lot = 100K.

Here's the math (assuming E/U):
Using math induction, the equation, (1K €) * TP = .005 * equity, implies that 100 * (1K €) * TP = 100 * .005 * equity. The resulting equation simplifies to: (100K €) * TP = .5 * equity.

Here's an example:
(1K €) * TP = .005 * $1K
TP = .005 * $1K / (1K €) = .0050 (or 50 pips)
(100K €) * .0050 = $500
$500 / $1K = .5 (or 50%)

PS: Some might recognize that equation. It's dynamic position sizing formula rewritten slightly differently.

 
luc

Math never looked soo good. :-)
Just need to keep MAE under control.

WOW_giphy.gif
 
hakchinoy

When the market is ranging, I intuitively have a really good feel for MAE. However, when the market is trending, the back-and-forth movement of PA tends to detune my intuitive feel for MAE. I incorporated supply and demand (S&D) analysis into my system to help me navigate the trends. Yet, I realized yesterday--when I reviewed my trading plan--that I have been forgetting to do my S&D analysis. OUCH!

Since you also trade R/S (albeit from a slightly different perspective), perhaps we could work together to tackle controlling MAE more effectively (aka money and risk management)--from both R/S trading perspectives.

 
luc

Hak, I don't even know what supply demand analisis is. I've seen it mention here a few times. Maybe I know it by some other name. Will research it.
I find trends difficult. Often feel trapped out. Would/ should swing more but low tollerance for pullbacks. Then if out and trying to get back in, often feel trapped out.
I'd love to collaborate on keeping a tight ship. Especially as I want to scale up my position size as much as I can. But I won't be trading much for the next 17 days. planning on finally catching up on reading. On holiday with the family. But discovered there is wifi on the beach as I write this, so may a couple trades from time to time.

 
hakchinoy

Check out KingKlippel's comments in the "Stop Hunting" thread. He explains the concept there.

Why not check out some setups on higher TFs (like H1, H4, and/or D1), and scale into a larger position? :)

 
luc

Yes, was thinking to build up a position on a higher timeframe to keep the account working for me.... and now you mention it, seeems an even better idea. I have clearer view of what the e-mini S&P 500 will do next ( trend down deep and for a long time) than EURUSD. But will look at EURUSD again Monday.

 
luc

Hmmm..... not sure what to think of that thread. I guess we each should have some working model of the actions of the various market participants. The model I use is different ( not neccessarily more correct but useful to me). I used to immagine "they" were deliberately targeting MY positions. Maybe they were but thinking of it that way just isn't useful to me. My fault for trading with scared money....low hanging fruit.
Where stops would be is blatantly obvious most of the time. So are targets. What I don't know is which will actually be successful. No one knows that. I try to figure out what the majority will see as the best stop 'n' target in terms of oportunity, reversion to the mean, risk management, profit and time. Sure, during low volume big institutions will seek to make setups less clear or even set traps by making a poor setup look better but they can't do magic and don't have full power. With or without marketmakers the recent price action tells us what kind of behavior to expect. I hunt stops; in the sense that when I see a price that has already repelled several tests (in defense of those stops) I work out what to do if the price comes anywhere near its magnetic pull/push again; and I'm just another trader on the other side.

 
hakchinoy

KingKlippel's comments focused on identifying areas on charts, where institutional orders tend to pool. Most of the rest of the posts in that thread are irrelevant for a S&D analysis.

 
luc

OK they tend to enter a range at some measured-move away from a breakout. At that point traders agree the price is now about right. Shawn touched on this in his talk about pivots.

 
hakchinoy

Both Shawn, Jeff, and Curtis have touched on this: they refer to the concept is spotting pools of liquidity on the charts. S&D also goes by another name: Accumulation and Distribution.