Comment on Indicators (Part 2)

Karthik Rangappa commented on 01 Jan 2016, 10:40 AM

1) If the strategy requires you to use excessive leverage – for example buy futures + sell options simultaneously then the position is highly leverage. This is what I mean
2) For you buy @ 100, with target of 110 and SL of 95, then you are risking 5 for an expectation of 10…risk to reward is 1:2…which is good. However if your strategy gives you a risk to reward of 1:1 then it may not be that great…you are risking 1 for a reward of 1.
3) This seems ok
4) Ok
5) Divide the over all profit by total number of trades …you will get profitability per trade
6) Drawdown is a measure of how much the profitability has declined from its highest point. For example if my overall profitability Is currently at 10K…but historically it was at 22K, then the drawdown is 12K. Higher the drawdown, the more volatility the strategy is.

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