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Atricle Dump - Precision Money Management
When we talk about link popularity, it basically denotes the visibility or how popularly known the website is in the online world. It is also equated to the number of links any search engine is able to find or locate to a website.With this, Link Popularity has become a famous and critical area of any search engine optimization campaign in the present times. The link popularity is the basis used by famous search engines like the Yahoo and Google on how a specific website ranks in the search engine result pages. So how can one achieve a high ranking? What are the things to do and not to do in order to gain huge link popularity?Experts have realized that there are certain things that one must not do to attain good link popularity.• Always use original and not plagiarized or copied contents.• Never put any garbage links on it.• Never ever spam.• Do not create any dummy or bogus contents just so you can build links.These are just but few reminders by experts. Now, to direct you to the right way of building popularity links, a handful of tips are given:• Give simple, direct, and concise content.• Make
FL is the average fractional loss for NL losing trades
The fractional quantities can each be expressed individually as percentages but they should be expressed as decimal fractions in the equation.
In order to use equation (1), a profit goal must be established over a definite period of time. The profit per trade needed to meet a specific profit goal in a given amount of time depends on the number of promising trades likely to be identified by the trading system over that time period. The number of promising trades that become available within a given time period must be estimated judiciously because the last thing we want to do is force a trade under less than ideal conditions. In other words, we need to remain true to whatever system we are using.
For N trades each valued at an average capital amount C, the average fractional profit can also be defined by the total dollar profit goal DG divided by the dollar sum of all N trades DS,
FP = DG / DS
Since DS is equal to the average capital amount C times the number of trades N, this becomes,
FP = DG / (C N) . . . . . . . . . .
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Most of us think of a trailing stop loss when the term money management is mentioned. William O’Neil in his book, “How to Make Money in Stocks”, used a value from 7 to 8%. Many stock advisories, including Stansberry and Associates, Outstanding Investments and the Oxford Club, typically use a 25% trailing stop loss. Option advisories use still higher values in the 35% range, as is done by Michael Lombardi, and up to as high as 50%, as used by Dr. Stephen Cooper. Trailing stops are typically used along with a maximum percentage of capital per trade to avoid large portfolio draw-downs in the event that a given trade goes badly.
Beyond this precaution, there is little theory to explain how position size and trailing stop losses should be arrived at, leaving the impression that they can be arbitrarily chosen based on one’s risk comfort level. However, this is not the case. Too narrow a stop loss setting can eat into profits by exiting volatile trades too early. Too wide a stop loss setting can eat into trading profits by consuming too much capital. A systematic way is needed to choose an optimum position size and stop loss setting to achieve a precise level of money management.
Intuitively, the higher the success rate in correctly choosing the direction of trade and the higher the average gain per trade, the looser one can afford to set his stop loss. However, when one has a specific earnings goal, this relationship needs to be more precise. Fortunately, the availability of consistent trading system performance data allows the use of an engineering approach. This approach enables us to define a very precise relationship between the average return for a series of trades, the percentage of correct choices in the direction of a trade, the size of each trade, profit goals and the appropriate stop loss settings.
The model introduced here for precision money management is based on average values of historical trading system performance and is only applicable when a trading system is consistently followed. The model should not be applied to unstructured trading across a variety of instruments requiring varying trading techniques. Each trading system or technique generates a unique set of statistics to which this methodology can be applied on an individual basis.
The model is derived based on fractional averages from information readily available to anyone that uses a trading system consistently. A pair of concise algebraic relationships evolves in the process. Finally, examples are provided to show the roles of position size and stop loss settings in meeting profit goals.
FP is defined as the average fractional profit for all historical trades being taken into consideration. FP is equal to the sum of the fractional gains and losses for all trades divided by the total number of trades N,
FP = (sum of fractional gains + sum of fractional loses) / N
In order for this to be valid, each trade must involve very close to the same amount of capital that we will assign an average value C. For example, if there were 3 historical trades resulting in +25%, -15% and +30% gains, the average fractional profit would be (0.25 - 0.15 + 0.30)/3 = 0.133. Of course, a much larger statistically significant number of trades would be used in practice.
Since the sum of fractional gains is equal to the number of gains NG times the average fractional gain FG, and the sum of fractional loses is equal to the number of loses NL times the average fractional loss FL, the definition can be expressed as,
FP = (NG FG + NL FL)/ N
It is understood that NG + NL = N. The value of NG divided by N equals FC, the fraction of trades chosen in the correct direction. NL divided by N equals (1 – FC), the fraction of trades chosen in the wrong direction. So N divided into NG and NL leaves the following form.
FP = FC FG + (1 – FC) FL . . . . . . . . . .(1)
Where,
FP is the average fractional profit for N trades that each uses an average amount of capital C
FC is the fraction of trades chosen in the correct direction
FG is the average fractional gain for NG winning trades
FL is the average fractional loss for NL losing trades
The fractional quantities can each be expressed individually as percentages but they should be expressed as decimal fractions in the equation.
In order to use equation (1), a profit goal must be established over a definite period of time. The profit per trade needed to meet a specific profit goal in a given amount of time depends on the number of promising trades likely to be identified by the trading system over that time period. The number of promising trades that become available within a given time period must be estimated judiciously because the last thing we want to do is force a trade under less than ideal conditions. In other words, we need to remain true to whatever system we are using.
For N trades each valued at an average capital amount C, the average fractional profit can also be defined by the total dollar profit goal DG divided by the dollar sum of all N trades DS,
FP = DG / DS
Since DS is equal to the average capital amount C times the number of trades N, this becomes,
FP = DG / (C N) . . . . . . . . . .(
Creating a website is easy. However, most people have a tendency to get the website made and then just let it sit there doing nothing. All their effort and money is wasted through a website that merely exists. You should get it working so that it generates new leads and increases your business.Take a long hard look at your website and evaluate how much of the glitter and flash is just because you could put it there. A simple design is good enough provided the website loads fast. People on the Internet expect quick service, it is after all called the information superhighway and they expect fast moving traffic. Make sure your website does not take more than 5-8 seconds to load on a reasonably fast internet connection. If it takes more than that then people will just move to the next one. What is worse, they will never come back and start avoiding your website.Next, be clear in what you say. The title of every page must make it clear what you are all about. Do not go in for officious or impressive sounding titles that will require a thesaurus to decipher. Keep the language simple and the sentences short. Make your visitors want to read what you have presented on you
Intuitively, the higher the success rate in correctly choosing the direction of trade and the higher the average gain per trade, the looser one can afford to set his stop loss. However, when one has a specific earnings goal, this relationship needs to be more precise. Fortunately, the availability of consistent trading system performance data allows the use of an engineering approach. This approach enables us to define a very precise relationship between the average return for a series of trades, the percentage of correct choices in the direction of a trade, the size of each trade, profit goals and the appropriate stop loss settings.
The model introduced here for precision money management is based on average values of historical trading system performance and is only applicable when a trading system is consistently followed. The model should not be applied to unstructured trading across a variety of instruments requiring varying trading techniques. Each trading system or technique generates a unique set of statistics to which this methodology can be applied on an individual basis.
The model is derived based on fractional averages from information readily available to anyone that uses a trading system consistently. A pair of concise algebraic relationships evolves in the process. Finally, examples are provided to show the roles of position size and stop loss settings in meeting profit goals.
FP is defined as the average fractional profit for all historical trades being taken into consideration. FP is equal to the sum of the fractional gains and losses for all trades divided by the total number of trades N,
FP = (sum of fractional gains + sum of fractional loses) / N
In order for this to be valid, each trade must involve very close to the same amount of capital that we will assign an average value C. For example, if there were 3 historical trades resulting in +25%, -15% and +30% gains, the average fractional profit would be (0.25 - 0.15 + 0.30)/3 = 0.133. Of course, a much larger statistically significant number of trades would be used in practice.
Since the sum of fractional gains is equal to the number of gains NG times the average fractional gain FG, and the sum of fractional loses is equal to the number of loses NL times the average fractional loss FL, the definition can be expressed as,
FP = (NG FG + NL FL)/ N
It is understood that NG + NL = N. The value of NG divided by N equals FC, the fraction of trades chosen in the correct direction. NL divided by N equals (1 – FC), the fraction of trades chosen in the wrong direction. So N divided into NG and NL leaves the following form.
FP = FC FG + (1 – FC) FL . . . . . . . . . .(1)
Where,
FP is the average fractional profit for N trades that each uses an average amount of capital C
FC is the fraction of trades chosen in the correct direction
FG is the average fractional gain for NG winning trades
FL is the average fractional loss for NL losing trades
The fractional quantities can each be expressed individually as percentages but they should be expressed as decimal fractions in the equation.
In order to use equation (1), a profit goal must be established over a definite period of time. The profit per trade needed to meet a specific profit goal in a given amount of time depends on the number of promising trades likely to be identified by the trading system over that time period. The number of promising trades that become available within a given time period must be estimated judiciously because the last thing we want to do is force a trade under less than ideal conditions. In other words, we need to remain true to whatever system we are using.
For N trades each valued at an average capital amount C, the average fractional profit can also be defined by the total dollar profit goal DG divided by the dollar sum of all N trades DS,
FP = DG / DS
Since DS is equal to the average capital amount C times the number of trades N, this becomes,
FP = DG / (C N) . . . . . . . . . .
In this article I'm going to talk strictly from a subscriber's point of view. If you're marketing online, what would you do to find out how people think so you can target your e-mail promotions or a newsletter better?Well, here's your opportunity.Even though I'm running my own newsletter or a bulletin (what I call it) and have my own subscribers, I'm also subscribing to a number of newsletters myself. TSM Bulletin is located at http://tsmbulletin.ogdteam.com.Today, I'm going to reveal why I open some newsletter e-mails or e-mail promotions more than the others. And also, why I always look forward to only a few of them. Yes, only a few.The reason I'm subscribing to newsletters, ezines or what ever you want to call them, is because that's the only way to learn from a marketer and find out what they're up to, without having to buy all of their products. Clever, I must say.Why are you subscribing to newsletters? To learn or .....???But somehow, some of them have convinced me to buy some of their products even though I wasn't planning on doing so. But how did they do it?Let's begin the journey.At this very moment as I'm typing t
The model is derived based on fractional averages from information readily available to anyone that uses a trading system consistently. A pair of concise algebraic relationships evolves in the process. Finally, examples are provided to show the roles of position size and stop loss settings in meeting profit goals.
FP is defined as the average fractional profit for all historical trades being taken into consideration. FP is equal to the sum of the fractional gains and losses for all trades divided by the total number of trades N,
FP = (sum of fractional gains + sum of fractional loses) / N
In order for this to be valid, each trade must involve very close to the same amount of capital that we will assign an average value C. For example, if there were 3 historical trades resulting in +25%, -15% and +30% gains, the average fractional profit would be (0.25 - 0.15 + 0.30)/3 = 0.133. Of course, a much larger statistically significant number of trades would be used in practice.
Since the sum of fractional gains is equal to the number of gains NG times the average fractional gain FG, and the sum of fractional loses is equal to the number of loses NL times the average fractional loss FL, the definition can be expressed as,
FP = (NG FG + NL FL)/ N
It is understood that NG + NL = N. The value of NG divided by N equals FC, the fraction of trades chosen in the correct direction. NL divided by N equals (1 – FC), the fraction of trades chosen in the wrong direction. So N divided into NG and NL leaves the following form.
FP = FC FG + (1 – FC) FL . . . . . . . . . .(1)
Where,
FP is the average fractional profit for N trades that each uses an average amount of capital C
FC is the fraction of trades chosen in the correct direction
FG is the average fractional gain for NG winning trades
FL is the average fractional loss for NL losing trades
The fractional quantities can each be expressed individually as percentages but they should be expressed as decimal fractions in the equation.
In order to use equation (1), a profit goal must be established over a definite period of time. The profit per trade needed to meet a specific profit goal in a given amount of time depends on the number of promising trades likely to be identified by the trading system over that time period. The number of promising trades that become available within a given time period must be estimated judiciously because the last thing we want to do is force a trade under less than ideal conditions. In other words, we need to remain true to whatever system we are using.
For N trades each valued at an average capital amount C, the average fractional profit can also be defined by the total dollar profit goal DG divided by the dollar sum of all N trades DS,
FP = DG / DS
Since DS is equal to the average capital amount C times the number of trades N, this becomes,
FP = DG / (C N) . . . . . . . . . .
The third stage is to plan your site. You should not start to build a marketing website until you have a plan of exactly what you want to achieve with it. It can be used simply as an advertisement, introducing an offline company to online visitors, or a full blown internet shopping facility where the customer can purchase from a range of products and pay by credit card or a specialized online payment system such as PayPal or e-Gold.You can get some ideas for your site by browsing through other sites on the internet that are doing something similar to what you want to do. They may be selling the same product or providing the same service. You don’t directly copy them, but you can get some good ideas. They will be, after all, your competitors on the internet so you should be aware of what they are doing.Once you have a plan of your website drawn up, and know how many pages you need and what will be on them, you can start to build it. You don’t have to do everything at once, and once you get started you can add to it later. The important step is to start to build your site. If you decided to opt for a web host at around $25, they should provide you with a temp
Since the sum of fractional gains is equal to the number of gains NG times the average fractional gain FG, and the sum of fractional loses is equal to the number of loses NL times the average fractional loss FL, the definition can be expressed as,
FP = (NG FG + NL FL)/ N
It is understood that NG + NL = N. The value of NG divided by N equals FC, the fraction of trades chosen in the correct direction. NL divided by N equals (1 – FC), the fraction of trades chosen in the wrong direction. So N divided into NG and NL leaves the following form.
FP = FC FG + (1 – FC) FL . . . . . . . . . .(1)
Where,
FP is the average fractional profit for N trades that each uses an average amount of capital C
FC is the fraction of trades chosen in the correct direction
FG is the average fractional gain for NG winning trades
FL is the average fractional loss for NL losing trades
The fractional quantities can each be expressed individually as percentages but they should be expressed as decimal fractions in the equation.
In order to use equation (1), a profit goal must be established over a definite period of time. The profit per trade needed to meet a specific profit goal in a given amount of time depends on the number of promising trades likely to be identified by the trading system over that time period. The number of promising trades that become available within a given time period must be estimated judiciously because the last thing we want to do is force a trade under less than ideal conditions. In other words, we need to remain true to whatever system we are using.
For N trades each valued at an average capital amount C, the average fractional profit can also be defined by the total dollar profit goal DG divided by the dollar sum of all N trades DS,
FP = DG / DS
Since DS is equal to the average capital amount C times the number of trades N, this becomes,
FP = DG / (C N) . . . . . . . . . .
Many companies have their own web sites. It is essential element in modern business. Process of creating a company’s web site is one of the most important steps for having a successful Internet presence. Many people will get the first impression by visiting your web site. If you sell software like our company Infacta, Ltd. you will probably have clients in different parts of the world. Majority of them will never even come to your office. They will visit your web site and if they like what (and how) you offer they will buy your software online. You have to enable to your clients, prospective clients and press to easily find what they want. So you can see that this way, your company’s web site is even more important than your company’s offices. In e-business bytes & skills are more important than brick & mortar. Successful corporate web sites have several common elements. In this article you will learn about them.First important thing in creating your corporate web site is that you have to be aware of the fact that creation of your web site is not one-man-show or one department’s job. Usually, marketing department with technical stuff is working on corporate web sites, but
FL is the average fractional loss for NL losing trades
The fractional quantities can each be expressed individually as percentages but they should be expressed as decimal fractions in the equation.
In order to use equation (1), a profit goal must be established over a definite period of time. The profit per trade needed to meet a specific profit goal in a given amount of time depends on the number of promising trades likely to be identified by the trading system over that time period. The number of promising trades that become available within a given time period must be estimated judiciously because the last thing we want to do is force a trade under less than ideal conditions. In other words, we need to remain true to whatever system we are using.
For N trades each valued at an average capital amount C, the average fractional profit can also be defined by the total dollar profit goal DG divided by the dollar sum of all N trades DS,
FP = DG / DS
Since DS is equal to the average capital amount C times the number of trades N, this becomes,
FP = DG / (C N) . . . . . . . . . .(2)
Example 1:
Let us suppose that we have done a sufficient number of trades using our system to determine that the average fractional profit is 10%, the average gain per trade has been 29% and the fraction of times we chose the correct trading direction was 70%. Further let us set a goal to earn $3,000 per month. By our estimate, we figure that we can safely enter an average of 3 trades a week and remain within trading system guidelines. This equates to 3 trades per week times 4.33 weeks per month or an average of 13 trades per month.
Variables: FP = 0.1
N = 13
DG = $3,000
FC = 0.7
FG = 0.29
Solving equation (2) for C gives us the average size of each trade,
C = DG / (FP N) = $3,000 / [(0.1) (13)] = $2307.69 for the average size of each trade
Rearranging equation (1), the average stop loss setting FL must be,
FL = (FP - FC FG) / (1 - FC)
= [0.1 – (0.7) (0.29)] / (1 – 0.7) = - 0.3433 or -34.33%
Example 2:
Using essentially the same situation, we can look at what the effect of certain improvements in trading would have on the profits. Say we habitually exit winning trades too early and could possibly increase the average fractional gain FG from 29% to 36%. From the same relationship used for example 1, the resulting stop loss setting FL could then be widened to,
FL = (FP - FC FG) / (1 - FC)
= [0.1 – (0.7) (0.36)] / (1 – 0.7) = - 0.5066 or -50.66%
Example 3:
Let’s suppose that for a series of potentially high yielding trades we know that an extra wide stop loss setting of -60% is needed and we want to know what the effect will be.
First we might want to look at the effect of a wider stop loss setting on profits with everything else remaining constant. We do this by equating the right sides of equations (1) and (2) and solving for DG,
DG = (C N) [FC FG + (1 – FC) FL] . . . . . . . . . .(3)
= ($2307.69) (13) [(0.7) (0.29) + (1 – 0.7) (-0.6)] = $689.99
Clearly, our original monthly profit goal of $3,000 can not be met without some additional changes, such as an increase in the number of trades from 13 to 57 over the month period. But this is not feasible since it was already estimated that the maximum number of trades identified by the trading system would be only 13 per month.
Example 4:
Next, since the trades in example 3 are believed to be potentially high yielding trades, we might look at the increase in the fractional gain per trade FG needed to justify the wider stop loss setting of -60% and still meet the original profit goal. By rearranging equation (1),
FG = [FP - (1 – FC) FL] / FC
= [0.1 – (1 – 0.7) (-0.6)] / 0.7 = 0.4 or 40%
So the average fractional gain for winning trades FG would need to increase from 29% to 40% to justify a widening of the stop loss from -34.33% to -60%, keeping everything else the same while meeting the monthly profit goal.
The foregoing examples give insight into trading system characteristics that affect position size and stop loss settings. Narrow stop loss settings imply a smaller fraction of trades chosen in the correct direction or a smaller fractional gain for winning trades. Wider settings imply the opposite. Stop loss settings should not be arbitrarily set independently of position size, trading goals and trading system performance. Stop loss levels more or less define future profits for a given set of trading rules, whether the user realizes it or not. While it is laudable that traders are encouraged by their advisors to adopt money management, the recommendation of a specific stop loss value without knowing the profit goal and average position size can be misleading. When a trading system is used consistently, this model enables precise money management.
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