Manage risk with an excel formula for sizing (Day trading)

Discussion in 'Risk Management' started by Diego443, Dec 8, 2015.

  1. Diego443

    Diego443

    Hey All,

    I want to crate an excel formula for determining my size of a trade but I am stuck right now as I am not really familiar with excel.

    Following scenario:

    I intent to SPEND $1000 but this number has to be affected by two variables, with the help of a formula.

    1.Range, which is divided into a scale from 1-5. 5 should represent a very large range and must influence SPEND by a decrease of 17.5%. 1=3.5%,2=7%, 3=10.5%, 4=14%.

    2.Probability, divided into 1-5 as well but with different weights. 5 is very high probability thus this equals 0%. 4 decreases the SPEND by 3%, 3 by 6%, 2 by 9%, 1 by 12%.

    I hope this makes sense and I am open for ANY suggestions.

    Diego
     
  2. In H3: 1000, In H4=Range, H5=Probability
    H6: =CHOOSE($H$4,0.035,0.07,0.105,0.14,0.175)
    H7: =CHOOSE($H$5,0.12,0.09,0.06,0.03,0)
    H8: =$H$3-($H$6+$H$7)*$H$3
     
    Diego443 likes this.
  3. Diego443

    Diego443

    Thank you a lot!