The Lagrangian approach amounts to searching for points where the constraint is satisfied and the constraint and the level curve of the objective function are tangent to one another. With three variables, the Lagrangian conditions will say that the ...

Optimized Risk vs Reward Equation

We discussed multi variable functions a few months back. Here's an interesting book on the subject: Solved problems in Langrangian and Hamiltonian Mechanics by Claude Gignoux and Bernard Silvestre-Brac It will probably take me twenty readings before ...

Optimized Risk vs Reward Equation

Why don't you all just burn him at the stake? Would that make you happy? If anyone bothered to read (at least longer than last two pages ), he would realize that the unwritten book would be about reversals and that the discussion here is about money ...

Optimized Risk vs Reward Equation

One good example: The following analogy may be helpful: Governments often use taxes as Lagrange multipliers! Read on: How much gasoline I buy affects my happiness. (If I buy too little gasoline then I can't go anywhere, but if I buy too much then I ...

Optimized Risk vs Reward Equation

CONGRATULATIONS!!! Didi you passed the cigars in the neighborhood? But be prepared for the fact that for you the sleep will be a rare commodity in next 365 days. One of the things that may help you is the device that simulates ...

Optimized Risk vs Reward Equation

For any given value of c, we can use Lagrange multipliers to find the optimal value of f and the point where it occurs. Call that optimal value f0,occurring at coordinates (x0,y0) and with Lagrange multiplier λ0. The Lagrange multiplier is the rate ...

Optimized Risk vs Reward Equation

I'm reading a few books about Lagrange since last Sunday. That lambda popped out from time to time during my research and I decided it is only fair that we get to know each other better. It appeared at first when I did research on Euler (Lagrange ...

Optimized Risk vs Reward Equation

First, congratulations for your daughter. If you manage to be as thorough as you are in your trading research, I’m sure you’ll be a great dad. As for the forum, do you really think you’ll have time to visit it and converse with the forum members ...

Optimized Risk vs Reward Equation

I have figured how to calculate the formula for the function of the area G(Г). And the hint was in one of my old math books. image The funny thing is, I've never predicted that there isn't a single formula. All 2D functions and surface formulas ...

Optimized Risk vs Reward Equation

OK, given any two 3D points in 3D space I can now procure formulas for all three 2D exponential functions. I'm struggling to implement this in excel. A few new questions have emerged: 1. If one of 2d functions is risk and second is ...

Optimized Risk vs Reward Equation

ah, you are using the gradient, don't you? The arrows literally pointing at the saddle point.

Optimized Risk vs Reward Equation

This is a money management discussion, it was stated that it is mm discussion several times by different participants. You can use any system you like for your first entry. After you do that, we are discussing what is the most profitable way to ...

Optimized Risk vs Reward Equation

@monek No. You can add up to 0.9999 lots (9.99 cents per pip) as your second position. The problem is, what is the ideal number between 0.0001 and 0.9999? This is true for any system and the responsibility for it not to happen is at broker's side. ...

Optimized Risk vs Reward Equation

hmm, it's like you assume that your opponent (all the other guys in the market) will play flawlessly and you use mixed strategy (determine the best losing outcome for you if you know the other one will execute his best strategy). You used Nash ...

Optimized Risk vs Reward Equation

Averaged second chance hmm, interesting, it reminds me of reserve parachute strategy; when the primary folds, you will not get killed, you will only break both legs and lose a few teeth. You will not be pretty but you will be able to do more jumps.

Optimized Risk vs Reward Equation

twoblink can be bitter sometimes, but I am hardly surprised. If anyone invests some time in reading all of his posts (and I mean all) he/she will see how many times people ask the same question that was answered a few posts above. I have much more ...

Optimized Risk vs Reward Equation

OK, back on the subject. While rereading the article about minimax theory, I may have solved the other 2D graph, the profit one. We have a zero sum game, with a large but finite number of players. The notion that you determine the worst possible ...

Optimized Risk vs Reward Equation

Monek87, not a bad one, perhaps this one is more appropriate image Read post #37, I was taught how to determine the validity of the source based on available data. Besides, twoblink gave the best explanation (and definition) of the trend than ...

Optimized Risk vs Reward Equation

hmm, risk function is the integral of the loss function.

Optimized Risk vs Reward Equation

Maybe like this "A differentiable manifold is a topological space on which we can do calculus" url saddle point In the context of undergraduate multivariate calculus courses, a saddle point is a point on a two-dimensional surface in three ...

Optimized Risk vs Reward Equation