Hi all, I've used this formula before, to establish stakeing based on SR for various sports betting systems.
S= Stake % (amount to risk)
n= no of bets/trades
R= Your system or methods Ave strike rate (%of winning trades)
S= 100 / (4 (Log(n)/- Log(1 - R)))
For example you trade 40 weeks a year and have one trade every day. 55% of your trades win. n=200 R=0.55
S= 100/4*(Log(200)/- Log(1 - 0.55)))
S= 100/4*(Log(200)/- Log(0.45)))
S= 100/4*(Log(200)/- Log(0.45)))
S= 100/4*2.30103/0.34679
S=100/26.5412
S=3.76% (Always round this down!)
The two things to note are that a Higher strike rate will raise the stake % While more trades will Lower it (and vice versa)
Do you think this formula bears relevence in the world of trading?
S= Stake % (amount to risk)
n= no of bets/trades
R= Your system or methods Ave strike rate (%of winning trades)
S= 100 / (4 (Log(n)/- Log(1 - R)))
For example you trade 40 weeks a year and have one trade every day. 55% of your trades win. n=200 R=0.55
S= 100/4*(Log(200)/- Log(1 - 0.55)))
S= 100/4*(Log(200)/- Log(0.45)))
S= 100/4*(Log(200)/- Log(0.45)))
S= 100/4*2.30103/0.34679
S=100/26.5412
S=3.76% (Always round this down!)
The two things to note are that a Higher strike rate will raise the stake % While more trades will Lower it (and vice versa)
Do you think this formula bears relevence in the world of trading?