I had some difficulties to grasp the different approaches of Risk used in Trading and especially how they relate to each other. I thought putting this in excel could help.
You will find attached a spreadsheet that can help to understand how the different kinds of risk (Open Risk, Closed Riskâ€¦.) fluctuate when the Current Price (Open Profit) and Stop Price (Locked In Profit) change.
In the spreadsheet there are 5 open trades. You can edit the Closed Equity, Open Equity and locked in Profit values (all the yellow boxes) to see their effect on Total and Closed Risk Equity. I hope this can help those like me who had difficulties with theses concepts.
Discussions about Money Management and Risk Control.
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- EQUITY & PORTFOLIO HEAT.xls
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