Thank you for this article and for describing the modified version which is more applicable for position sizing use in the financial markets. One question I have is whether this formula could also be used in the context of dynamically setting when to exit a position in order to minimize losses and maximize gains. I have pretty static stop loss and profit take percentages set up for all my positions now and am wondering if this formula could be modified a bit to use this same probability calculation to generate a profits/loss percentage to determine when to exit a position. Has this type of application been done before? Thanks.
Hello,
Thank you for this article and for describing the modified version which is more applicable for position sizing use in the financial markets. One question I have is whether this formula could also be used in the context of dynamically setting when to exit a position in order to minimize losses and maximize gains. I have pretty static stop loss and profit take percentages set up for all my positions now and am wondering if this formula could be modified a bit to use this same probability calculation to generate a profits/loss percentage to determine when to exit a position. Has this type of application been done before? Thanks.