Abstract
Day traders are likely to use leverage to increase their profits. This paper systematically analyzes the effect of leverage on profit when using a popular day-trading strategy, and clarifies the relation to two optimal leverage strategies proposed for maximizing trading profit: the Kelly criterion and the Optimal fraction criterion. Our empirical analysis shows how leverage can increase the profit in day trading.
- © 2018 Pageant Media Ltd
Don’t have access? Register today to begin unrestricted access to our database of research.