RE: money management

["neo" <neo1@xxxxxxxxx>]

Glen

I have read Van Tharp's book. He does discuss position sizing but as I
recall it was in general. How specifically does one use position sizing?
Does Ralph Vince have a book on this that you recommend?

Thanks, neo


~  -----Original Message-----
~  From: owner-metastock@xxxxxxxxxxxxx
~  [mailto:owner-metastock@xxxxxxxxxxxxx]On Behalf Of Glen Wallace
~  Sent: Saturday, August 11, 2001 12:05 PM
~  To: MetaStock listserver
~  Subject: Re: money management
~
~
~  I see money management, or bet sizing, as addressing both risk
~  management and position sizing.  Proper money management
~  inherently manages and quantifies risk.  It balances the trade-off
~  between risk and return.
~
~  Your own system, Terry, of risking a small percentage of your
~  account on each trade is, in fact, both risk management and
~  position sizing.  It is a fixed fractional (Fixed f) anti-martingale
~  system, where position size increases as you profit, and it
~  decreases when you take losses.  It will give you geometric
~  returns with arithmetic changes in risk.  My question, though,
~  is how do you know that the percentage you choose is correct.
~
~  I'm not a great proponent of Optimal f or any other particular
~  money management system.  What I do advocate (and I give
~  Ralph Vince full credit for my own epiphany) is quantifying risk
~  and return and making an informed decision.