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Hi!
I am surprise of this argument going on. There is absolutely no doubt that
the same size bet is a wrong atrtegy. It has been proved again and again that
risking too large portion of trading capital per position will eventually
cause even the most profitable trading system to fail. Of curse down sizing
the bet after a drawdown makes the recovery slower but it avoids the ruin. I
have been in this biseness for more than 25 years and one of the reason small
accounts NEVER survives it's because they are unable to size their bets:
it's all or nothing.
If you backtest the same system with and without position sizing you will
find that the drawdowns are smaller ofr the same results.. or if you are
ready for the same dradowns size your profit will be greater. It has been
even proved that with sound money management (read bet sizing) you can
overcome your negative edge in some negative expectation game.
Position sizing is as much important that gatting accurate entry/exit signals.
Good luck to all in your search.
Jean-Jacques Chénier
GLOBAL MANAGEMENT
tel: 212/758-0725
fax: 212/758-0683
e-mail: MacroMnt@xxxxxxx
Web: w<A HREF="www.trendoscil.com">w
w.trendoscil.com</A>
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