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Like the other authors, I too am a delighted customer
and user of Trading Recipes. I use it for position trading
employing end-of-day data. (My datafeed is Technical Tools
Chartbook95).
I don't happen to like the phrase "money management" -- to
me it sounds like the advice you get on Wall Street Week
with Lumpy Rutherford: put X% in gold, Y% in real estate,
Z% in stocks, and the rest in AA rated municipal bonds.
But what's going on in futures trading is different: you're
trying to figure out what size positions to take. So rather
than calling it "money management", I will say "betsize
calculation".
And Trading Recipes is simply the best there is, at betsize
calculation for futures trading. It lets you trade
multiple commodities out of the same account, and apply
the same betsizing rules to all. For example, this idea
is easy to try out in TR (and impossible in Omega products):
Risk 2% of equity on every trade, BUT don't let my
total risk exposure exceed 30% of equity, AND don't
let my exposure in any one commodity group (grains,
meats, currencies, oils, etc) exceed 15% of equity.
Further, Trading Recipes lets you trade several SYSTEMS
out of the same account, each system trading (if you wish)
multiple commodities. So you can test the following idea:
Trade "UniversalLT" and "Catscan" and "Aberration"
out of the same account. Risk 1% of equity on every
trade that Aberration takes, 1/2% on every trade that
Catscan takes, and risk a fixed $500/trade on every
trade that UniversalLT takes. But never let my
total risk exposure in any one commodity exceed 3%
of equity.
Trading Recipes has builtin functions that let you
take trades AT RANDOM, for example to test entries or
exits all by themselves. You can finally test that
system Larry Williams keeps talking about, enter
at random and then exit on the first profitable open.
I have programmed the "ROI" betsize calculation algorithm
of Rumery and Lehman's "Performance One" package, into
Trading Recipes. It takes one line of code. Except
that I am obsessive-compulsive about code so I add
two more lines to find and fix situations in which it
*might* take the square root of a negative number,
and two more lines to find and fix situations in which
the calculated number of contracts to trade is not
an integer. But, five lines of code ain't so terrible;
remember that TradeStation can't do this at all.
Sure it's a DOS program. Low-res graphics. Clunky
spreadsheet user interface. GREAT analysis. This
program has helped me study betsize selection algorithms
more thoroughly than any other tool, and I am sure it
gets credit for a large part of my trading success.
--
Mark Johnson Silicon Valley, California mark@xxxxxxxxxxxx
"... The world will little note, nor long remember, what is said
here today..." -Abraham Lincoln, "The Gettysburg Address"
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