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----- Original Message -----
<DIV
>From:
Avcinci
To: <A title=amibroker@xxxxxxxxxx
href="">amibroker@xxxxxxxxxxxxxxx
Sent: Friday, November 01, 2002 10:24
PM
Subject: Re: [amibroker] Re: Dynamic
Money Management
Hi, Chris:
>Maybe this is too simplistic, but I think of MM in termsof 2
separate components, position sizing & trailing stop-based
exits.>
MM tells you how much to invest. It
really has little to do with trailing stops. The latter is part of system
development. Your initial risk is determined by your hard stop placed at the
beginning of the trade. But the trailing stop, if you use one at all, is not
considered part of MM per se.
FWIW, a
number of authors, including Schwager and Kaufman, disagree and include
everything but the kitchen sink in MM.
"Risk
control is typically referred to as "money management," although I believe
that the former represents the more descriptive
label."
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size=2>
"A risk
control plan shold include the following elements: [only section titles
given]
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Maximum
Risk per Trade
Stop-Loss
Strategy
<FONT face="Times New Roman" color=#800000
size=2>Diversification
Reduce
Leverage for Correlated Markets
Market
Volatility Adjustments
Adjusting
Leverage to Equity Changes
Losing
Period Adjustments (Descretionary Traders Only)"
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size=2>
---- J.
Schwager, "Schwager on Futures: Technical Analysis"
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size=2>
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