Tuesday, October 18, 2011

43. How the % profit rate of return of the equity and the % maximum draw down, depend on the % of profitable trades, the % profit per trade and the % of funds risked per trade. A back-office simulator


Here is a simple simulator in Excel, where by giving 
a) initial funds 
b) success rate of the trades
 c) Reward/risk ratio , 
it estimates by simulation the  expected equities path, average rate of return of the period, average maximum draw-down etc
It is very useful in designing strategies in binary options, where the reward/risk ratio  , is given by the broker and is more or less fixed. 





The image of the input or setup interface of the simulator is the next.