How the different kind of Risks relate to each other

Discussions about Money Management and Risk Control.
Post Reply
White Cube
Roundtable Fellow
Roundtable Fellow
Posts: 98
Joined: Fri Oct 20, 2006 2:25 pm
Location: London, UK

How the different kind of Risks relate to each other

Post by White Cube » Fri Aug 31, 2007 9:56 am

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 Risk….) 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.

Raphael
Attachments
EQUITY & PORTFOLIO HEAT.xls
(22 KiB) Downloaded 589 times

Post Reply