|
PureBytes Links
Trading Reference Links
|
There's this option and a million others. You can do whatever you want.
The question is what are you trying to accomplish, i.e. what feature of your
performance are you trying to optimize? If you don't answer this then
you're flying by the seat of your pants -- which probably won't serve you as
well as a well-considered and researched strategy. Are you trying to
maximize your return-on-account, your final account value, some flavor of
risk-adjusted return, what? The program is: 1) Answer this question (you
can change your goals over time...), 2)do some work to see how to best
accomplish your goal, 3) trade your account w/ the leverage (and
diversification) determined by 2).
That's my view, anyway...
Alex
-----Original Message-----
From: Cab Vinton [mailto:cvinton@xxxxxxxxxxx]
Sent: Friday, February 04, 2000 10:12 AM
To: L_Omega
Subject: RE: Re[7]: Rocket Science
> My best guess is that ploughing ALL your profits
> back in to a bigger position (and hence increasing
> your leverage) is bad money-management
> and will lead you to have much higher odds of going
> bust than an approach where you increase your risk
> in proportion with your overall account value.
Don't forget that there's always the option of betting aggressively with
accumulated profits & conservatively from your initial capital, e.g., total
risk = 1% of initial capital + Optimal F% of profits. Granted, this will
lead to very high drawdown statistics, but at least the drawdowns will be
coming from the market's money, & the potential payoff may well be
worthwhile.
Cheers,
Cab Vinton
|