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Turtles' Position Sizing
Last Post 04-29-2010 04:33 PM by mur ang. 1 Replies.
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Marco Grecchi
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04-29-2010 09:29 AM
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    I’m  trying to figure out a way to handle position sizing by using the concept of  units, as developed by the Turtles.  First, I’d like to recap the concept, as far as I understood it.

    If I have a starting capital of USD 100,000 and I set my risk at 2% of my equity, then I can bet USD 2,000 on my trade. The Turtles called that 2% risk (2,000 USD in my example) a unit.

    That determined how many contracts they could buy/sell at one time. They used ATR to determine it.  So if you have an ATR of 425 and a limit of 2*ATR, your contract risk is 850. With a trade risk set at 2,000 USD you can trade (2000/850) = 2.35 contracts (2 contracts actually,  rounded down to the nearest integer). That 2 contracts represents 1 unit. Turtles  were allowed to add to their position in any single market up to 5 units.

     

    So what could be the code to have as many contracts as possible in my unit as determined by a SetTradeRisk instruction, but limit my open postion to a pre-set number of units?  If I have a parameter that says e.g. MaxContracts = 5, that will limit the number of contracts.  If I set  TradesAllowed = AllOrders, I have a pyramiding effect, but I have no control on how many trades I have in my open position on each market.

    Any suggestion?

     

    Incidentally, does your Super Turtle System follow this concept?

     

    Thank you

    Marco

    mur ang
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    Posts:525

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    04-29-2010 04:33 PM
    superturtle follows the same concept as my Turtle. I really don't believe in pyramiding. How many leaves of pyrminding do you want to allow. Also what are the allocation rules or pyramiding. You could do it using multiple entry order which require given lower level order to be filled If MarketPositionPlus("EntryBuy1")=1 then Order with different name for adding to buy end if then set ordertype ot samedirectdiffsignal. that how I would do it.
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