Please i have a quick question, i have a mechanical system i am currently trading that does really well, i bought Forex tester and backtested it from 2001 until 2012 and it did quite well.
System result
Wins 75%
Loss 25%
Max Draw down 3%
Annual return 15% - 25%
Average wins 49pips
Average loss 50pips
Probability of 3 consecutive Losing trade 5%
I have been using the fixed percentage of account size to determine position size, risking between 0.5% to 2%. However i feel that it is not optimal for a system with this track record.
Does anybody know a risk management formula that takes into account the win/loss ratio and average wins vs average loss in order to determine the position size.
Will really appreciate any input, Thank you
System result
Wins 75%
Loss 25%
Max Draw down 3%
Annual return 15% - 25%
Average wins 49pips
Average loss 50pips
Probability of 3 consecutive Losing trade 5%
I have been using the fixed percentage of account size to determine position size, risking between 0.5% to 2%. However i feel that it is not optimal for a system with this track record.
Does anybody know a risk management formula that takes into account the win/loss ratio and average wins vs average loss in order to determine the position size.
Will really appreciate any input, Thank you