a.Hypothetical End of Month Results
If we trade with the following setup:
12 trades
1.5 risk/trade
3% reward/trade
Wining Percentage 50%
The above setup of data would lead to the following results:
Trading Expectancy: +0.75%
Kelly: +25%
The following graph represents a probable scenario of one month performance after placing 12 trades.
We may have many other scenarios terminating the month with, if we trade with the above input given.
The graph below represents 800 scenarios we may have in a spread of 800 months, as a result of the above
inputs, we may get:
The worst month among these 800 scenarios in 800 months is -13.5% of losses
Average return for these 800 scenarios in 800 months:+8.8% profits
Best month among these 800 scenarios in 800 months would be: +31.5% profits
Standard Deviation: 8.3
Standard Deviation allows us to quantify how much the return may vary around the average.
Expected Return at the end of each month
Average Expected Return we may have: +8.8%
Maximum Expect Return we may have: +17.1%
Minimum Expect Return we may have: +0.5%
b.Hypothetical End of Year Results
If we trade with the following setup:
140 trades
1.5 risk/trade
3% reward/trade
Wining Percentage 50%
The above setup of data would lead to the following results:
Trading Expectancy: +0.75%
Kelly: +25%
The following graph represents a probable scenario of one year performance after placing 140 trades
We may have many other scenarios terminating the year with, if we trade with the above input given.
The graph below represents 800 scenarios we may have in a spread of 800 years, as a result of the
above inputs, we may get:
The worse year among these 800 scenarios in 800 years had: +28% profits
Average return for these 800 scenarios in 800 years: +104% profit
Best years among these 800 scenarios in 800 years had: +181% profit
Standard Deviation: 33
Using standard deviation would make us able to quantify how much the return may vary around the average.
Expected Return at the end of each year:
Average Expected Return we may have: +104%
Maximum Expect Return we may have: +137%
Minimum Expect Return we may have: +71%
