Re: [amibroker] Turtles money mgt and position trading rules -- OPINIONS?

["Al Venosa" <advenosa@xxxxxxxxxxxx>]

Gary:
 
Like you, I have tested the Turtles breakout entries and exits on equities, 
and also like you found them to be less than satisfactory in regards to 
profitability and robustness. I think, from what all I've read, that this 
type of breakout works much better with futures than equities, probably because 
futures trend better than stocks. However, this is not to detract from the 
Turtles' money management rules. Their MM system is what made them lots of money 
and fame, not their entry/exit rules. So, whatever trading system you use, I 
think use of such a risk management approach is sound. There are lots and lots 
of other ideas floating around that differ from the Turtles pyramiding scheme. 
One espoused by Tharp starts out with risking the usual 1% of current equity, 
then, after you have made x% profits (you set x to be whatever you want), you 
then start risking the market's money. What does this mean? Well, suppose your 
initial equity were $100,000, and your risk is 1% ($1000). Suppose your equity 
has grown to, say $115,000. You can now begin to get more aggressive without 
risking more than your own 1%. You do this by assuming the extra $15 K is not 
yours but rather the market's. So, on your next trade, you still risk 1% 
of current equity or $1150, but in addition, you risk, say, 5% of the 
$15,000 market's money ($750). Thus, on the next trade, you risk $1,900, thereby 
winding up buying (or shorting) 90% more stock without risking any more than 
your original 1%. You keep doing this until such time that you want to 'convert' 
the market's money to your own again. You might want this to occur at $150,000 
equity, maybe at a lower level. This is up to you. At that time, you revert back 
to risking just 1% or $1500 now, since there is no market money because you are 
now calling it your own. You start all over again, risking only 1%, becoming 
more aggressive again as you add more market money to your equity, until the 
next equity conversion level ($200,000). See how it works? There are lots of 
other ideas that can be used. This was just one. 
 
My 2 cents. How about yours? :-))
 
AV
<BLOCKQUOTE 
>
  ----- Original Message ----- 
  <DIV 
  >From: 
  Gary 
  A. Serkhoshian 
  To: <A title=amibroker@xxxxxxxxxxxxxxx 
  href="">amibroker@xxxxxxxxxxxxxxx 
  Sent: Wednesday, September 24, 2003 7:08 
  PM
  Subject: [amibroker] Turtles money mgt 
  and position trading rules -- OPINIONS?
  
  Hi all,
   
  Curious to read if any of you have played with the money management or 
  position sizing rules the Turtles used as listed at <A 
  href="">http://www.originalturtles.org/system.htm
   
  I've found the entries not to work well with equities, but the money 
  management and position sizing rules echo the points Al Venosa has made about 
  risk-oriented position sizing.
   
  Gimme your two cents, and I'll gladly take it...
   
  Regards,
  Gary
   
   
  
  
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