In Figure 26.11, note how the values of both the two winning trades and the
losing trades are larger than for the same trades in Figure 26.6. This is not always a
given, just because we’re risking more in the trades in Figure 26.11. Many times,
risking more might mean a faster equity growth and higher equity in the end, but it
also might mean a more volatile development, which means situations where the
equity may have dipped to such low levels that the dollar values of the positions are
lower, despite a higher risk per trade. A limited amount of capital available for new
positions also might limit the amount invested (and consequently also won or lost),
on those days where the system signals several new positions simultaneously.
Figure 26.12 shows the end result from trading these three markets with a
fictive fof 4 percent. As you can see, the total return is higher, but there defi-320 PART 4 Money Management
FIGURE 26.10
Changing f from 2 to 4 percent.