[Reason for stopping compound interest calculation first] Recalculate from the amount of a single loss

Last New Year, I created a compound interest sheet in a spreadsheet.

It’s the classic question of how much to increase per month to know how much you’ll have after a year.

…How much can I lose at once, again?

Just before closing, I realized that that column wasn’t anywhere.

Only the calculations on the increasing side were neatly filled in.

I’ll write about redoing this sheet this New Year as it is.

The first thing I entered wasn’t the increasing rate.

Good evening!

I’m Masashi^^

What I stopped this time is calculating backward from the target amount.

Instead, I put in the amount you can lose per instance at the front.

From that amount, I derive the quantity, and the rest is received as the result.

After trying for half a year, the number of times you panic at the end of the month clearly decreased.

This is the story of the New Year sheet where only the calculations on the increasing side were all filled。

✅ While creating it, it was quite enjoyable

To be honest, it’s fun to make that sheet.

If you raise the rate a little, the numbers after a year jump a lot.

If you push it a bit further, you can’t help but wonder what happens next.

Before I knew it, I had entered even more aggressive rates and watched.

Up to this point, I think many people go through this path.

The problem is, there’s one number that never appears during this process.

The number of how much you lose per turn.

The increasing calculation doesn’t include the decreasing turns.

Because it’s not included, the market assumption in my head keeps trending upward.

If you open the screen in that state, the losing turns look like exceptions.

Treating them as exceptions means that record of that turn isn’t kept.

✅ The increasing calculations don’t include decreasing turns. So the losing turns look like exceptions。

While gazing at the numbers after a year, the amount you lose per turn never appears.

? If you back-calculate from a target, the required number of turns is decided first

There’s another tricky part to backward calculation.

When you decide the amount you want to reach, the required number of turns comes out from there.

It’s a matter of how many more times you must take this month.

Having this number in your head changes how you view the market.

Even on days when conditions aren’t aligned, you’re more concerned with the remaining turns.

And your hand moves toward what you’re concerned about.

I did this many times at the end of the month.

There’s a clear record that only the end of the month increases in quantity.

I didn’t intend that at all.

The backward-calculated numbers quietly pushed me.

? When the remaining turns are in your head, you become more concerned with those than the conditions。

The habit of large end-of-month quantities came from the backward-looking target.

? If you don’t fix the amount per turn, other numbers won’t have meaning

So, where should you reset them from?

In short: start with the amount you can afford to lose per turn.

If that isn’t decided, other numbers become vague.

For example, you can’t calculate how many consecutive misses you can endure.

If you can’t calculate, you also can’t decide when to stop after a losing streak.

Conversely, once the amount per turn is decided, it naturally follows from there.

How many turns to stop, where to stop; all can be arranged around the per-turn amount.

The sheet was built with no foundation, and that’s why it looked neat but wasn’t usable on the actual screen.

? If the per-turn amount isn’t fixed, it’s hard to decide when to stop。

Calculations without a foundation may look tidy, but they can’t be used in front of the screen.

? What I put first was the amount you can lose per turn

In the new sheet, this is placed at the very top line.

Against the account balance, what percentage per turn would be safe?

Honestly, how you decide the percentage is different for everyone.

What I used as a standard was whether I could move as usual the day after a drop.

Not a calculation, but my reaction decided it.

There was a month where I tried a slightly larger percentage, and my hands retracted the next day.

On the days when they retracted, I skipped even if conditions were right.

In other words, the amount affected my judgment.

The amount whose change affects me is, for me, too large a sum.

From there I reduced a little and searched for a line where nothing changes the next day.

【One-turn tolerance: 1% of the account / If this is exceeded, reduce the quantity】This is the current line.

? The amount that changes my judgment was too large for me。

Example: 【One-turn tolerance: 1% of the account / If this is exceeded, reduce the quantity】

? Merely changing the order changes how it looks

What changed wasn’t the calculations but the order of decisions.

Previously I would decide the quantity first, then look for a place to put it.

With this order, you tend to move the place you put it to your advantage.

If you move it closer, the decrease amount becomes smaller even with the same quantity.

And the placed location often gets hit right away.

Now the end location is decided first, then the quantity is considered.

On days when the location is far, that day ends up with a smaller entry.

Previously, far days involved larger entries, so it was the exact opposite.

We keep: 【Exit: the place decided just before; Quantity: decide from there; Tolerance: 1% of the account】

Just changing the writing order showed a difference when viewed month by month.

I realized the larger decreasing turns tended to have almost the same shape.

? The place comes first, the quantity later. If you reverse the order, you tend to adjust the place。

Example: 【Exit: place decided just before; Quantity: decide from there; Tolerance: 1% of the account】

⚠ You’ll want to increase the rate in the months that grew

At the end of a month that went well, the temptation always comes.

If this pace continues, perhaps you can make it a bit bigger.

Moreover, in calculation terms, it usually appears correct.

Balances are rising, so even with the same percentage, the amount increases.

The danger is raising the percentage as well.

I did it once, and the next month I was neatly brought back.

When it was brought back, the amount became larger.

The first turn after increasing was the heaviest for me.

So now I’ve decided to move the percentage only once a year.

As balances change, the amount changes automatically, so that suffices.

How far to reduce the amount is explained in the fund management chapter of the教材.

⚠ The first turn after increasing was, for me, the heaviest。

Moving the percentage only once a year. As the balance changes, the amount moves automatically.

? How to handle the months when it decreases should be written first

I hadn’t decided the decrease side, only the increase side.

I think this order was reversed.

Because the decreasing month is more prone to sloppy judgments.

Now I draw a single line somewhere in the month to stop there.

Ending is not about the amount. It means that month will not take in anything new.

During the first year, I couldn’t do this.

If there are remaining days, you naturally want to recover.

I learned to do this by writing on paper at the start of the month.

If you think about it at the end of the month, your mood gets mixed in.

Writing in a period when mood isn’t mixed was the most reliable method.

? In decreasing months, judgments are more sloppy. So I write at the beginning of the month。

Example: 【This month’s stop line: record at the start of the month / If received, stop new entries for that month】

✔ Do not add numbers in the middle of the month

Another rule is how I handle deposits to the account.

If you add in the middle of the month, the allowed amount changes at that point.

When it changes, two kinds of quantities mix within the same month.

A month with mixed entries is not comparable later.

So I move the foundation only at month transitions.

This is subtle, but it makes the records much easier to read.

Because the foundation doesn’t move within a month, you can see the quality of the steps.

If the foundation moves, you can’t tell if improvements came from it or from deposits.

This is exactly like the verification discussion: keep one thing to move at a time.

✔ If you don’t move the foundation for a month, you can see only the quality of steps。

Moving the foundation only at month transitions. Do not mix two kinds of quantities within the same month.

❌ Do not attempt to recover within the same day

On days with large decreases, there’s always a temptation to do this.

To calculate how much to enter to recover it.

If you punch it into a calculator, you get the answer immediately.

And the calculation itself is usually correct.

Because it’s correct, it’s even more dangerous.

That calculation assumes the next hit will occur.

Moreover, the person who wants to calculate at that moment isn’t in a normal state.

When your judgment is down, you tend to push a larger amount.

So now I’ve decided not to calculate it on the same day.

If you do the same calculation the next morning, about half the motivation fades.

The turns you didn’t do then were turns you didn’t need to do.

❌ The recovery calculation is built on the premise that the next hit will occur。

On days with a large decrease, I don’t calculate that day. I leave it until the next morning.

? Keep living expenses clearly separated

This is the foundation for today’s discussion.

If the money in the account is tied to living expenses, it collapses.

To collapse means you can’t decide the per-turn amount.

If you have next month’s payments in mind, the allowed amount changes each time.

The changing allowance essentially means you haven’t really decided it.

So the first thing to do isn’t calculating the rate.

It’s to determine an amount that can be separated from living expenses.

Even if the separate amount is small, that’s not a problem.

If you build the steps with a small amount, the form won’t change even if you increase it later.

Conversely, starting with an amount that isn’t separable makes monthly steps vary.

Monthly-changing things rarely fit your form.

? The monthly varying allowance didn’t differ much from not deciding it。

The first thing to do isn’t calculating the rate, but confirming an amount that can be separated from living expenses.

? Tools don’t decide the quantities for you

There are various tools that help you search for candidates.

I use them too, and morning workload has become much lighter.

However, what I wrote today lies outside the tools.

How much you can decrease in one turn is determined by your account and living circumstances.

Those personal circumstances aren’t visible to the tools.

If you mix here, you’ll get quantities that increase only on days when the tool shows them.

Whether it appeared or not and how much you enter are separate judgments.

There was a time I mixed this area.

On days when candidates stood out, I unconsciously increased them.

When I reread the records, I realized it and was shuddered.

So now I fill the quantity column before looking at the tool’s display.

? Treat whether it appeared or not and how much you enter as separate judgments。

Fill in the quantity column before looking at the tools’ displays.

⭕ If this way of deciding doesn’t fit you

Finally, I’ll note what to do if it doesn’t fit you.

For those who want to increase a lot within a short period, this order is too slow.

Because you first narrow the per-turn amount, the growth will inevitably be gradual.

Also unnecessary for those who plan to enter the same quantity every time.

In that case, I’d like you to take only the portion that separates living from money.

This method works when you feel end-of-month quantities tend to be large.

Or when the end of a shrinking month varies each time.

Both were things I struggled with for a long time.

Whether the numbers got better immediately after changing isn’t the point.

What changed was the frequency of panicking at the end of the month.

Because I panicked less, records remained until the end.

⭕ What changed first was not the numbers, but the frequency of panicking at the end of the month。

Not suited for: those who want to increase a lot in a short period, those who always enter the same quantity

? Summary: Place the decreasing turn before the increasing calculation

The New Year’s compound-interest sheet I made didn’t have a column for how much you lose per turn.

Since the decreasing turns aren’t included in the increasing calculation, losing turns look like exceptions.

So I moved a line at the very top of the sheet to indicate how much you can lose per turn. The actual item is 【One-turn tolerance: 1% of the account / If exceeded, reduce the quantity】.

Quantities are considered after deciding where to finish. Place first, then quantity. If you reverse it, you tend to adjust the place to fit.

Not increasing in the months that rose, and writing the end-of-month finish at the beginning of the month. These two things reduced the frantic end-of-month activity.

On days with a large decrease, I don’t perform the recovery calculation on that day. If you leave it overnight, about half the motivation disappears in the morning.

If you only look at the numbers after a year, try adding a single line at the very top of the sheet ^^

? See the features and usage of GOLD Line Sniper AI

Thank you always for your involvement ^^