Scaling in: martingale vs incrementally, which is best?

Discussion in 'Trading' started by KCalhoun, May 27, 2020.

  1. Tradex

    Tradex

    How can Kelly (a simple percentage) be higher than total equity?
     
    #11     May 28, 2020
  2. Girija

    Girija

    Average returns and square of the std dev of returns can be used to derive scaling factor. Volatility needs to be a factor. It is unrealistic to do this manually every time you decide to scale in.
    I am not sure inverse will make an ideal hedge. Why are you not considering option to hedge.
    If you are in and out fast it is hard to work a hedge. Someone like Destriero may have a better guideline without infringing on their edge. I am not sure this thread has gotten his attention.
     
    #12     May 28, 2020
  3. KCalhoun

    KCalhoun

    Initially I'm testing swingtrading today TNA/TZA and GDX/DUST. choppy flat markets don't help though :p
     
    #13     May 28, 2020
  4. Martingale so much funner
     
    #14     May 28, 2020
  5. ironchef

    ironchef

    You are right, Kelly is typically a fraction of your total capital (perhaps 5-10%?). If you scaled in so that your total bet in this one trade is > 5-10% you exceeded your Kelly.

    Maybe I don't understand Kelly. If so correct me please.
     
    #15     May 28, 2020