Hello Futures IO,

This is my first post. I have a trading system I am evaluating against different position sizing strategies using Monte Carlo simulation. In this system I have a stop loss as a worst case get me out of the trade, however, it is hit only 3% of the time within the given data set. Most of the exits are a technical trigger or a take profit trigger. In terms of risk for position sizing, would you(NexusFi community) utilize the stop loss (most conservative) or the Max adverse excursion of a trade as the risk of a trade for position sizing strategies. I lean towards a combination of looking at both, and thinking somewhere in the middle position sizing wise would be my target. I.e. if stop loss risk method says 2 contracts, and max adverse risk method says 5, I would split the difference and round up to 3.

Thanks,
-Dave

Dave83K 

Hello Futures IO, This is my first post. I have a trading system I am evaluating against different position sizing strategies using Monte Carlo simulation. In this system I have a stop loss as a worst case get me out of the trade, however, it is hit only 3% of the time within the given data set. Most of the exits are a technical trigger or a take profit trigger. In terms of risk for position sizing, would you(NexusFi community) utilize the stop loss (most conservative) or the Max adverse excursion of a trade as the risk of a trade for position sizing strategies. I lean towards a combination of looking at both, and thinking somewhere in the middle position sizing wise would be my target. I.e. if stop loss risk method says 2 contracts, and max adverse risk method says 5, I would split the difference and round up to 3. Thanks, -Dave

@Dave83K

About what kind of amount of money you talk here? as there is in general no rule regarding exponential growth in your account and the risk you after woods should or can take.

You may give us some more information about this to get an answer which fits you.

Symple