By Gibbons Burke January 2000 Abstract / Introduction: Money management is like sex: Everyone does it, one way or another, but not many like to talk about it and some do it better than others. But there’s a big difference: Sex sites on the Web proliferate, while sites devoted to […]
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Every day, traders must make decisions: What to trade. When to enter. How large a position to take. When to exit. Whether the system is healthy. Discretionary traders acknowledge the subjectivity of their decisions and draw on experience. Systematic traders use objective functions designed to identify important decision criteria and quantify […]
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Position sizing is a calculation which determines the optimal amount of units to purchase. Position sizing is a little known concept amongst the majority of traders and investors and yet it often has dramatic effects on the overall performance. As an example, it has been statistically proven that a random entry […]
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This tutorial written and reproduced with permission from Peter Ponzo Okay, here’s the story: In 1944 Anne Scheiber, a lifelong federal employee whose income never surpassed $3,150 a year, invested $5,000 in blue-chip stocks. When she died in 1995 her stocks were worth $22 million and she was receiving an annual […]
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Don’t talk about your open positions In browsing around the web I often encounter discussions of the merits of a particular trade and opinions about the direction of a market. I know that the traders who voice these opinions have good intentions and much of the discussions could be helpful […]
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