Sunday, June 1, 2014

Math formula to calculate number of trades to reach specific level?

"Average profit per trade" is not a metric which most traders use. It combines several factors (such as win/loss ratio, 
average winner, average loser, etc.) which most traders prefer not to blend together.

But, let's do this using your metric.

You're asking (if I understand your question) how many trades will it take to get your account from a given initial balance, 
to a desired final balance, given that your trades are profitable overall, and the average profit per trade is known.

Let's define some terms:

iB = your initial account balance

fB = your final account balance

N = the number of trades you make, building your account from iB to fB

p = the average profit per trade

Here's the equation you're looking for:

N = [fB - iB] / p

Example:

You start with $1,000. Your trading system produces an average profit per trade of $13.29. You want to know how many 
trades it will take to double your account balance.

N = [2000 - 1000] / 13.29 = 76 trades (at which point your account balance will be $2,010.04)

Clint

p.s. - using your "average profit per trade" metric, margin does not enter into the calculation.

Read more: http://forums.babypips.com/forextown/31701-math-formula-calculate-number-trades-reach-specific-level.html#ixzz33S17tWZV

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