Leverage Strategy and a few words on risk/opportunityHello traders,
I started this script as a joke for someone... finally appears it could be used for educational content
Let's talk about leverage and margin call
Margin Call
A margin call is the broker's demand that an investor deposit additional money or securities so that the account is brought up to the minimum value, known as the maintenance margin.
A margin call usually means that one or more of the securities held in the margin account has decreased in value below a certain point.
Leverage
A leverage is a system which allows the trader to open positions much larger than his own capital. ... “Leverage” usually refers to the ratio between the position value and the investment needed,
Strat
The strategy simulates long/short positions on a 4h high/low breakout based on the chart candle close.
The panel below shows the strategy equity curve. Activating the margin call option will show when the account would be margin called giving the settings
Casino
I'm not doing any financial recommendation here.
I made this strategy so that people include more risk management metrics into their strategy.
From the code, we see it's fairly easy to calculate a leveraged position size and a margin call flag - when that flag is hit, the system stops trading.
I simplified things to the extreme here but my point is that the leverage is a double-edge sword gift.
Assuming we always take the same position sizing, increasing the leverage speed up how fast a margin could be ..... called. (bad joke? feel free to tell me). Not saying it will, saying it introduces more risk by design.
Then one could say "I'll just turn off that stupid margin call option". And that's when someone starts backtesting with unrealistic market conditions.
Finally...
When I backtest I always assume the worst in every scenario possible (because I'm French), I always try to minimize the risk first (also because I'm French), keeping as close from 0 as possible (French again)
Then I add the "opportunity" component, looking to catch the maximum of opportunity while keeping the risk low.
It's like a Rubix cube puzzle - decreasing the risk is one side of the equation but whenever I try to catch more opportunity... my risks increases.
Then I update my risk... and now the opportunity decreases... (#wut #wen #simple)
Completely removing the risk from a trading strategy isn't something I wouldn't dare doing.
Trading involves risk. Being obsessed by decreasing the risk is what I do BEST :)
Dave
Riskreward
Custom position sizerThis is a simple script to aid with determining position size.
Inputs are the intended entry price, desired risk (expressed as % of account at risk), account value, and leverage factor.
To use the script;
1. Identify and update the entry price (yellow line on the chart)
2. Update with desired risk
3. Update with account size
4. Adjust the leverage value until the stop loss (red line on chart for long positions, green line for short positions) reaches the desired value/location on the chart
The label will then update to show the required position size for the trade.
Risk/Reward (InfoPanel)Hello ladies (if any in my followers ?) and gentlemen
Here's your indicator of the day and once again given for FREE. What I'm going to say to my landlord if I can't pay rent because I'm not asking for $$ ?
I'll probably send the next indicators from below the town brige. Even then... I will still comply with my challenge to share 1 original indicator a day and not a copy of what already exists
The today indicator is to show you the great possibilites behind the TradingView Label object : Label
Profit And Loss LABEL
I thought about that one for a while and wanted to share how we can calculate dynamically a Risk to Reward ratio .
This indicator is not based on the price on the chart. I repeat before getting the question asked me privately 10 times This indicator is not based on the price on the chart.
"Then it's not useful dude, you're dumb". I agree and.... I agree... BUT you can now calculate your Risk to Reward ratio on TradingView directly rather than using an external Excel file. Who's dumb now :) ?
For those curious about it, I used this formula for the R:R ratio formula Calculating-risk-reward.asp
It will also display the Profit and Loss data based on your inputs only
ERRORS LABEL
I also added some basic errors management. If any error occur when you'll type your inputs, then a very mean Error label will appear and you'll have to fix the issues in less than a few seconds.
Otherwise your computer will explode (KABOOOOM) and your trading capital will be redirected to my own insurance fund (I have a family to feed, thanks for your sacrifices)
(end of joke)
In more seriousness, the engine will check if the TP1/TP2/Stop Loss/Entry price combinaisons makes sense. If not, you''ll be punished with an error label.
You can use this methodology for your own indicators in the futur to display dynamic messages based on users' inputs and/or current price on the chart
The educational video giving more details is coming right up.
You can watch it and should be located under "IDEAS"
Wshing you all a very fruitful end of your day and see you tomorrow for the last indicator of the week (baby David is tired and need his rest)
Dave
2R overlay positive biasHere is a pretty clean 2R - risk reward assessment that is overlaid on the price action. Positive bias, kind of lazy on the release but you can edit to change look back period or drop into one of your indicator edits as another metric for trade risk. If this helps drop a comment or thumbs up.
-Squam
MACD+STOCHASTICA simple strategy that use MACD and STOCHASTIC to give buy/sell signal. Use fractals to put stop loss
