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Market System Analyzer (MSA) is a trading software application that includes fixed ratio position sizing. Market System Analyzer is designed to improve the performance of existing trading systems and methods by enabling the trader to explore different position sizing methods, optimize trade sizes, and analyze their trading using methods such as Monte Carlo analysis and significance testing.

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In fixed ratio position sizing, developed by Ryan Jones ("The Trading Game," by Ryan Jones, John Wiley & Sons, New York, 1999), the key parameter is the delta. This is the dollar amount of profit per share/contract to increase the number of shares/contracts by one. A delta of $3,000, for example, means that if you're currently trading one contract, you need to increase your account equity by $3,000 to start trading two contracts. Once you get to two contracts, you need an additional profit of $6,000 to start trading three contracts. At three contracts, you would need an additional profit of $9,000 to start trading four contracts, and so on.

In Market System Analyzer, fixed ratio position sizing is selected from the choices on the Position Sizing Method tab.

Fixed ratio position sizing is selected from the Position Sizing dialog box.

Once the fixed ratio method is chosen, the main chart in Market System Analyzer is automatically updated to reflect the position sizing. The main chart displays the equity curve generated from the user's trade history with the chosen position sizing method. An example is shown below.

Main window of Market System Analyzer.

The initial position size (when the accumulated profits are zero) is a user selected parameter in version 2.0 of MSA.

To learn more about MSA, click here.

To learn how to optimize position sizing methods in Market System Analyzer, click on the Next button at the bottom of the page or click the Buy Now button below to download your own copy of Market System Analyzer.

Market System Analyzer 2/3

$199.00 (full version)  $50.00 (upgrade)

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For a general article on fixed ratio position sizing, click here. For a full list of available trading articles, select the Article Library link at left.