How do you mathematically calculate “leverage”, JITF?
Leverage = Value of Open position / Capital
Ok, fine.
But where did you get that formula, exactly?
Honestly, I don’t remember. It was some time ago. But I find it useful.
If you click on the word leverage on any strategy it will give you this explanation. Great feature!
I strongly agree with their summary:
“Higher leverage = greater risk.”
That is C2 definition of leverage.
And surprisingly, tons of traders around the world calculate leverage that way.
However, this calculation/metric (while somehow useful) does not tell the whole story, far from it.
I will explain why in a moment.
Per the description it acknowledges it doesn’t tell the whole story. No one is saying it does.
“This is a useful measurement, but it should be considered in context.”
Yes yes yes, I am aware of that.
But so far no one has been able to explain why.
(Can you?..)
And no, the answer has nothing to do with volatility or correlation, the factors mentioned by C2.
I feel that we have already covered this in detail. By all means share whatever you like.
Yes and no, there are still a few mathematical facts that C2 traders (and potential subscribers) should be aware of, so that they can make fully informed trading decisions.
It depends on what story you want to hear. On my opinion it is quite better parameter, then leverage you referred to. Especially figuring out martingale systems.
Same
True traders don’t want to hear stories, they want the facts, and the facts only, so that they can earn a consistent and steady weekly/monthly/yearly income with limited risk.
That’s it.
The rest is just conversation.
I am all for facts, and the “story” came from you, that is fact. 
I see your point of the calculating position size by risk parameters and for me you and @InteractiveAssets are talking about the same.
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I also truly believe that we are talking about the same exact thing , even though our definition of leverage seems to be different.
Could you give us a specific example on how to “deleverage”?
Thanks.
