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This thread has also surfaced on RT.
Chas
-----Original Message-----
From: charles meyer <chmeyer@xxxxxxxx>
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Date: Tuesday, May 25, 1999 8:42 PM
Subject: Re: FUTR: BET SIZE
>
>Pompatis:
>
>Some years ago when I was just getting started as a trader I read
>a lot of simple stuff on money management techniques. I formulated
>eight (8) different rules I titled 'money management techniques'.
>Oddly, I never implemented any of this information because my
>trading direction evolved to mutual funds. Obviously, I was a 'wannabe'
>futures trader. Here was my intuitive take on the bet sizing issue from
>reading a lot of books on gambling to wit:
>
>7. After each winning trade, or campaign, increase the number of
>contracts traded by one. Using this type of Anti-Martingale system
>of money management, you are 'pressing' after each win. Your first
>loss will be the largest, with the greatest number of contracts, but don't
>try to pick a top in the equity pattern of your account.
>
>8. After a losing trade, revert back to trading just one contract. Fol-
>lowing this money management system, you are 'backing down' after
>each loss. Always let the size of your total equity dictate risk size on
>the next position. Never increase the risk size, or contracts, when
>your account is in debit. Let the ups and downs of your total equity
>tell you the risk size of each new position; which in no event should
>exceed 2% thereof. Should you go into a prolonged slump with a
>string of losses, break it by switching to Mid-American contracts.
>
>Rememer guys, this is from someone who doesn't even trade
>commodities but I thought these ideas looked good on paper.
>Now, let's hear from some REAL pros on this issue.
>
>Charles
>_______________________________________
>-----Original Message-----
>From: POMPATIS@xxxxxxx <POMPATIS@xxxxxxx>
>To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
>Date: Tuesday, May 25, 1999 8:14 PM
>Subject: FUTR: BET SIZE
>
>
>>Traders,
>>
>>I know of a bond trader who uses some form of martingale position sizing
>>nearly every day.
>>
>>The idea, as I see it, is to first, know your systems stats very well and
>>second, use those stats to your advantage.
>>
>>Example: Your system currently has an average losing streak of 4 losing
>>trades.
>>Depending on your personal preferences, you could for example, begin to
>>increase your bet size after 4 losing trades.
>>
>> You could use your stats another way - for example, lets say your system
>>shows an historic tendency to have a longer than average winning streak
>after
>>a greater than average losing streak. If after 4 losing trades (your
>systems
>>average losers in a row) you begin to increase bet size and the losing
>streak
>>continues - you then reduce your bet size until you get 2 or 3 winners in
a
>>row - then you increase your bet size into the statisticaly anticipated
>>winning streak.
>>
>>This is just to get some juices flowing. I am no statistician. The main
>>point here is to know your trading results. I recomend creating an
>extensive
>>spread sheet which calculates all kinds of goodies about your cumulative
>>trades. You can come up with many ideas which you might find useful to
>>know, depending on your trading style, personal phsycology and your system
>or
>>method.
>>
>>Please share some ideas here guys and gals, this is a very important
topic.
>>
>>Best wishes,
>>
>>KM
>>
>
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