Re: [EquisMetaStock Group] Van Tharp's Money management (%VolatilityModel) : need help !!!

[khamsina11 <Khamsina11@xxxxxxxx>]

Hi David,

Thanks for your explanation. I understand this model applied to stocks now :). In other words, the "point value" for stocks is always equal to 1.
By the way, why do you say Van Tharp's work is not worthy ? ( what are the pros and the cons ?).

Regards,

Marco

PS : I'll take a look at Kase' books.




David Jennings a écrit :

Marco,

 

For what van Tharp's rubbish is worth, assuming 50K USD and purchasing microsoft, then Microsoft is trading at 24.31 with a daily range of 0.5. Lets say that the ATR for the last 10 days is 0.5. Then the volatility is 50 USD per hundred shares. Using  his 2% of equity at risk i.e. $1000.  Thus using his logic you would buy 2000 shares - assuming your stop was placed 1 ATR below the  purchase price.

 

I would counsel you to have a read of Cynthia Kase's book. The piece on Dev stops is well worth the purchase price in its own right.

 

----- Original Message -----

From: khamsina11

To: equismetastock@xxxxxxxxxxxxxxx

Sent: Monday, March 21, 2005 9:52 AM

Subject: [EquisMetaStock Group] Van Tharp's Money management (%Volatility Model) : need help !!!

Hi,

I am currently reading Dr Van Tharp's book "Trade Your Way to Financial Freedom" and I just can't understand his "Percent Volatility Model" for stock trading (he gave examples with futures but unfortunately not with stocks !).

Might anyone explain me with a example his "Percent Volatility Model" applied only to stocks.

Thanks in advance for your help,

Regards,

Marco

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