This is 15-min chart of MSCI Taiwan Index Futures (TIMSCI). It was easy to observe price set-ups were all for Short. I entered with entry and missing out good profit and taking silly losses.
I have been reading money management stuffs from Van Tharp and other web blogs. Thanks to TraderMike who has a well written entry on Position sizing. I am practising R-Multiples as introduced by Dr.Van Tharp for position sizing and evaluate my system expectancy.
Basically, the idea is to express all of my profits and losses in terms of my initial risk(R).
For example, if my risk for each trade is $300, then if I made $3000, then I have 10R gain. On the other hand, if I closed my trade with $150 loss, then I will have an 0.5R loss.
I learnt about the concept of expectancy. To make it simple, expectancy is the average amount you can expect to win(or to lose) per dollar at risk. Here is the formula:
Expectancy= (Probability of Win x Average Win) - (Probability of Loss x Average Loss)
More on this topic in my future posting.
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