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I've always liked Larry. Took in one of his seminars in the late 60s in
Florida.
I send my wife to church to pray for my mistakes. :)
I guess I'll have to recalculate the percentage of our investment capital
that we're trading.
If you look at our initial margin as our 'investment' in our futures trades
(and I know Jean Jacques doesn't agree, but no one has come up with a better
measure yet), we're investing 8.39% of our total trading capital on our
futures trading positions.
Maybe this will make some of the viewers feel a little better. It's just
that we don't think of it in that manner.
We have approximately 25% of our total trading capital in futures accounts.
Of that 25%, we invest one-third in our trades. I keep the futures trading
completely separate in my mind, so I refer to the one-third invested as
one-third of the funds we have on deposit at our future brokers, whether
that be cash or bonds. Our equity accounts are at other firms and never
shall the twain meet. We don't commingle funds or swap monies back and
forth. My brother has his accounts and we have ours. My brother and I do
have one futures account that we hold as a joint account, with about six
figures in it (enough to trade the equivalent of 6 e-minis using our
one-third ratio).
So if you look at it in this fashion, we're only trading 8.39% of our
capital in futures. Equities are another story, and I don't even want to
discuss that as I'm too tired with all of the commotion this thread has
generated.
Guy
Paranoia...you only have to be right once to make it all worthwhile!
-----Original Message-----
From: owner-metastock@xxxxxxxxxxxxx [mailto:owner-metastock@xxxxxxxxxxxxx]On
Behalf Of Sonnysark@xxxxxxx
Sent: Wednesday, July 12, 2000 7:17 AM
To: metastock@xxxxxxxxxxxxx
Subject: Re: Risk of ruin, amount per trade formula?
Larry Williams in his book Long-Term Secrets to Short-Term Trading sums up
his discussion of money management nicely by concluding, "If you are Tommy
Timid, use 5 percent of your bank; should you think you are Normal Norma,
use
10 percent to 12 percent; if you are Leveraged Larry, use from 15 to 18
percent; and if you are Swashbuckling Sam or Dangerous Danielle, use excess
of 20 percent of your account...and go to church regularly."
-Sonny-
"Speculation is not bad, but bad speculation is a disaster."
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