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I'm sure most traders that have been trading for any length of time, no
matter their style, would agree just how important good money management
is to their trading success. I know that when I read a trading magazine
or read a list like this, it's always the thought that someone invented
a totally *new* and exciting method of trading that captures my
interest. And yet, over time, the thing makes the most difference in my
trading is money management. Pure and simple. Boring. Easy to describe.
But human nature being what it is, I guess most all of us are weakest
when it hurts us the most. It's always one of those days when you aren't
at your best that you let your stop get past you...and then you do
further damage trying to deal with that mistake. And soon, you are truly
up a river without...well, the canoe sank awhile ago. The discipline of
trading is the area that is most difficult to pay attention to and to
practice over and over.
I know several sources of good advice in the area of sensible money
management and these works I treasure as my best friends. I'd trade all
the books in my trading library to keep the two or three that contain
that good sense about money management. And again, the ideas in those
books are not earth shattering or new or unique. But they are the most
important things *I* can re-learn and study over and over and over and
over...
I don't know if people are even interested in talking about this thread
any longer or if they want to know good sources for this common sense
topic. I'll post more thoughts and/or sources if people want to hear
more. If not, I'll go back to reading it to myself [truthfully, when
someone asks me about money management or my trading practices, it
forces me to go over them in my head and clarify them. This process is
invaluable...it's as good as re-studying the material, perhaps better.].
Tim Morge
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