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Robert Doeden wrote:
>
.....Snip, snip.....
>
> When I first started I tried using stops to control my risk. Didn't make
> any money. I decided that that wasn't the way to make money so I stopped
> using stops. I then started making money in commodities.
.....Snip, snip.....
> 10. By using good money management I reduce my risk.
>
> Someone else wrote an excellent post on money management recently. Money
> management is the key to market success.
>
> Bob Doeden
> ===========================================================
>
Bob,
Intuitively, I agree that good money management is essential to
successful trading. Having said that, I have to admit that I don't have
a clear sense of what money management really is. You express yourself
well, and I was hoping that you could explain just what "money
management" means to YOU.
For example, there are those who consider stops an essential part of
money management, yet it appears that you no longer use them.
I would also be interested in your thoughts on my personal theory
(unproven) that one could pick stocks by having a monkey with dirty feet
walk across the Wall Street Journal. Then buy on the right paw, sell on
the left, those issues selected by the monkey's footprints. (Stay with
me for a moment longer, I'm serious about this!) Then, with correct
money management, one could, over time, do about as well as he could
with more conventional methods of TA or fundamental selection.
In other word, I'm proposing the notion that purely random selection of
stocks/commodities, with rigorous money management, will beat the
greatest stock picker who manages poorly, every time. I hope I'm wrong
in this view because if I'm right, then TA may be hardly more than a
fascinating exercise in random selection.
What do you think Bob, should I get a monkey or the latest version of
Advanced Get?
Leo
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