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.
Investing, Saving, Spending, Stocks, Mutual Funds, Insurance and Financial Planning
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
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