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Hello Kent,
KR> I think the texts that recommend risking 2% per trade are recommending that
KR> as a guideline for discretionary trading and for beginning discretionary
KR> trading at that. After you've survived as a discretionary trader for a
KR> while, you should have a better idea of how much you can comfortably risk.
This discussion interested me so I went back and and figured out what
my risk per trade is vs. margin set aside per model. It comes out to
about 6 percent per position. I am certainly considered a gun
slinger trader meaning high risk by some in the industry. So these
other higher numbers just reinforce what I have been thinking all
along - that exemplifies inexperience. That's what these traders
are doing - babbling out loud and beating their chest. 20% percent
per trade or more, yea right. A hardy har har from on top looking
arrogantly down. mb
KR> Since Guy has a system which a couple of years of data, he can compute an
KR> expected return (with a certain amount of error) and he has a good idea of
KR> how successful any given trade will be. With this information, he can
KR> compute his "risk of ruin" (with a certain amount of error) and size his
KR> bets so that he maximizes gain with a "risk of ruin" that he is comfortable
KR> with.
KR> Kent
--
Best regards,
Mark Brown mailto:markbrown@xxxxxxxxxxxxx
Y = Offset + Amplitude * sin(Frequency * X)
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