1.
Please
enter
the values
for Win/Loss
ratio
and Win
Probability
2.
Click
the "Generate"
button
3.
Play with
other
parameters
or increase
Lines
Quantity
Frequently
Asked
Questions
What
does this
applet
show?
This applet
simulates
an equity
curve
of your
account
over the
long term
after
systematically
applying
your trading
rule with
known
parameters
of Win
Probability
and Win/Loss
ratio.
A whole
curve
consists
of about
450 pixels,
or trades.
Random
generator
decides
(as the
market
does)with
a given
probability
whether
you win
or lose
in a given
trade.
So the
equity
trajectory
is generated.
What
is a "Win/Loss
ratio"
parameter?
Divide
your average
winner
by your
average
loser
and you
get Win/Loss
ratio
What
is a "Win
Prob"
parameter?
This is
the number
representing
probability
of a winning
trade
of your
trading
system.
For example,
if you
traded
100 times
and won
in 61
trades,
then the
probability
to win
is about
61% or
0.61.
What
is a "Lines
Qty"
parameter?
This is
abbreviation
for "Lines
quantity".
This is
the number
of equity
curves
to be
generated
and plotted
simultaneously.
This feature
gives
you an
opportunity
to see
"what
if"
scenarios
for any
'level
of luck'.
In other
words,
even your
system
wins in
99.9%
of times,
there's
non-zero
chance
that all
your trades
can lose
for example
10 times
in a raw.
What
are the
"Kelly
Val"
and "Math
Expect"parameters?
Kelly
Value
and Mathematical
Expectation
of the
trading
system
respectively.
The first
one determines
the percentage
of your
capital
you should
put in
a single
trade
in order
to maximize
the over-all
account
performance
in a long
run and
minimize
the risks
of ruin.
The second
one is
interpreted
this way
: if it
is positive
than historically
your system
wins on
average,
if it
is negative
then you
better
look for
another
strategy...
