Difference between two Fixed Dollar options
Author: Salemali83
Creation Date: 3/3/2013 3:34 AM
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Salemali83

#1
The user guide does not explain clearly what the difference is between “Fixed Dollar”, “Position size”, “Staring capital or Equity” if I use one strategy in multi symbols back-testing.
Example
Starting Capital is 100,000, Fixed Dollar is 5,000 which is 5% of the equity and I assume that the enter condition is true for 2 companies A and B out of 5 companies, and assume that A has 60% equality constraint higher than B in the back-test?
What is the lot size for each trade every time both company A and B enter the market? And what is position size?
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Eugene

#2
You are confusing Raw Profit mode with Portfolio Simulation mode. Fixed dollar always remains fixed dollar. Fixed dollar is NOT 5% of equity. 5% of equity is accomplished by selecting "Percent Equity" = 5, thus switching to Portfolio Simulation mode.

While Fixed dollar may be a Port. Sim. mode option too, unlike the related option in RP mode, capital constraints apply: if you're out of money, you can't take more trades. In RP mode, there is no concept of "starting equity" and no capital restraints (exception: with "Fixed Dollar" in RP mode, trades can be skipped if the dollar size is less than the basis price of the instrument e.g. backtesting on a high-priced index).
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