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#467130 - 07/17/17 17:42 Square Root Rule & Additional Investment
DdlV Offline
Serious User

Registered: 06/10/13
Posts: 1253
Hi all. Looking to expand my understanding... laugh

The manual contains a description of the Square Root Rule for withdrawing and/or reinvesting: http://zorro-trader.com/manual/en/kelly.htm.

Once before in the Forum the question of adding additional funds to one's account came up, and the response was to simply treat this as a negative Withdrawal (W in the manual's formulas). (Unfortunately, can't now seem to find that thread/post... frown )

The question now in my mind is whether or not that's correct. Treating new investment funds as a negative Withdrawal has the effect of immediately subjecting them to the Square Root Rule, so that the mere action of depositing new funds makes a portion unavailable for withdrawal, which doesn't make sense to me.

For example, if I'd instead opened a new account with those new funds, wouldn't they have their own life and their own Square Root Rule progression?

So, bottom line: If new funds are added, whether to the same or a different account, doesn't each investment have its own independent timeline, Square Root Rule calculations, etc.?

Thanks.

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#467271 - Yesterday at 14:47 Re: Square Root Rule & Additional Investment [Re: DdlV]
DdlV Offline
Serious User

Registered: 06/10/13
Posts: 1253
Anyone can help clarify? jcl? laugh

Thanks.

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