Second thought is to find out what is the maximum "productive" capital one can have in the account. In other words, since the margin is restricted to 100 (in Zorro 1.20 S, Z5) there is an upper limit in terms of capital that will actually will be used for trading in the account. (Am I right here? or apart from the amount of lots, the number of trades is sensitive to the capital in the account if keeps on increasing?)

Let's try to find out the upper limit of capital taking as granted that only the number of lots increase rather than the number of trades. And let's take the rule of SQR to increase the margin you give somewhere. Let's also take as base line a 3000 capital and 50 of margin as it is as default in the backtests.

Supose one makes a profit of 3000 and now the account has grown to 6000. Applying the rule of SQR to find out what new margin I have to increase instead of blindly multiply by 2:

6000 = 3000 x (1 + 3000/3000) = 3000 x (2)

SQR (2) = 1,41, so instead of multiply by 2, that is, instead of increasing the margin from 50 to 100, I shall increase the margin to:

50 x 1,41 = 70 aprox.

So, for a profit of 100% from 3000 to 6000, the margin increase goes to 70 from 50.

Applying the same rule, one can deduce that the maximum productive capital for a margin of 100 is 12.000. To have more capital than this in the account doesn't make any sense and better get a new license and open a new account. Am I right with this logic?

There is also a third though when comparing with version 1.16. There, in the backtests for a capital of around 6000 was giving an income of around 1000 per month with 100 of margin. In version 1.20, you can see that now the capital necessary to use 100 as margin has gone up to 12.000. Or can we apply the same rule as 1.16 and for a capital of 6000 apply margin 100?




Last edited by Mangal; 12/29/13 10:37.