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Glossário de trading

Kelly Criterion

Risk Management

O que significa

A formula that calculates the mathematically optimal fraction of your account to risk on each trade, given your win rate and payoff.

Exemplo

With a 55% win rate and a 1:1.5 payoff, Kelly says risk about 18% of the account per trade. In practice traders use half-Kelly (~9%) because full-Kelly swings are too violent.

Erro comum de iniciantes

Beginners plug in a small backtest sample and bet full Kelly. With a noisy estimate, full Kelly can over-bet and bankrupt you -- always use a fraction, and only on a large sample.

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  • Expectancy — The average amount you expect to make per trade, accounting for both wins and losses. A po…

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