Trading Principles & R-Multiple Risk Simulator

Execution Engine 100 Trades

Starting Capital $10,000

Portfolio Risk per Trade (R) 1.0%

Spitznagel/Qullamaggie standard: 1.0% - 2.0%

Win Rate (%) 35.0%

Momentum setups routinely win only 30% - 40%

Average Winning R-Multiple 6.0R

Episodic pivots & monster runners deliver 5R - 15R

Average Loss Multiple 1.0R

Disciplined hard stop loss distance = 1.0R

Catalyst Synergy

"Stocks need a reason to move" (Episodic Pivots)

Trade Management Rules

Move Stop to Break-Even at 1.5R

Eliminates catastrophic scratch losses

10/20-Day MA Trailing Stop

Protects open runners from roundtripping

Trim Partials at 3 ATR Extension

Locks in fractional capital into liquidity spikes

$18,450.00

Final Portfolio Equity

+1.45R

Expectancy (R/trade)

8.4%

Max Drawdown

35 / 65

Wins / Losses (100)

100-Trade Portfolio Equity Curve ($)

Deterministic Monte-Carlo Sequence

Simulated Execution Ledger (First 15 / 100 Trades)

Complete series exportable below

#	Outcome	R-Return	Profit / Loss ($)	Portfolio Balance	Management Note

Qullamaggie 20 Principles: Mathematical Takeaways

1. Principle 12 (Probabilities & Expectancy): "You can have a 25% win rate and still make a fortune if your winners are +15R. You lose -3R across 3 trades, make +15R on the 4th, netting +12R."

2. Principle 14 (Trade Management): "Hold your wild horse. Most money is made in the waiting. Moving your stop to B/E at 1.5R and trailing via 10/20 MA avoids giving back monster moves."

3. Principle 15 (Risk of Ruin): "Beginners obsess over making money; veterans obsess over avoiding ruin. Keeping risk around 1-2% per trade is the sweet spot that survives inevitable losing streaks."