Volatility and Bet-sizing

David CooneyCEO, MahiFX

MahiFX is an online retail trading platform offering clients exceptionally competitive spreads and great customisable charting functionality.

David Cooney of MahiFX discusses how prudent bet-sizing can help mitigate your risk in the volatile Forex market.

About MahiFX

Agenda

• The theory on bet-sizing drawn from the science of gambler’s ruin

• The size of your bankroll and its effect on your profitability

• The table of margin to wealth• Questions

Gambler’s Ruin

The Science Behind the Game

A game of chance which can be considered to be a series of Bernoulli trials at which each player wins a specified sum of money for every success and loses another sum for every failure; play goes on until the initial capital is lost and the player is ruined.

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 790

5

10

15

20

25

30

Bankroll 1

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 790

5

10

15

20

25

30

Bankroll 10

Through the line

Game over!

End of the Line

Margin to Wealth

Questions?

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