In other words, if an index is at 100, and I want to buy a fixed amount at every 10 dollar price decrease, I can calculate my risk by using the above formula. Start at 100, add 100 at 90, add 100 at 80...etc... But what if I want to double my size at the same price increment. 100 = 100 shares. When the stock falls to 90, add 200 shares, when the stock falls to 80, add 400, add 800 hundred shares at 70,... etc. It seems like it should be an easy math problem. But it eludes me. It's all about calculating max possible loss. The flash crash, 2008, and the great depression when the stock market got hit with 90% losses come to mind. Any ideas?
I'm sorry. I'm pretty good at math, but I feel like an idiot right now. Can you lead me through this?
%%YES; most likely DOW will not go down 90%. But you may be right LOL, I seldom watch DOW;QQQ did go down about 90% in bear of 2000,2001,2002...….…………………………………………………………………………………………… 50%-70% is more likely; but FED may try to game it @200day moving average as he did this year.