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Hi Kelly
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On Fri, 08 Aug 1997 12:37:47 -0700 Troy Kelley wrote:
>Trading is hard...
>
>I have had 5 losses in a row over the past few days.
>
>How does one stay in this buisness?
>
>Troy
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Yes trading is not easy but it is simple. It's simple
because there are specific rules that must be
followed if we, as traders, are to succeed. Hard because
few traders apply the rules consistently enough.
5 losses in a row is not uncommon if you are experiencing
a drawdown period. Last year I was in the red for 9 months
and experienced a max drawdown of 28% before I turned it
around at the end of the year.
The key to survival is effective money management. I believe
that as a general rule no more than 2% of your capital
should be risked in any one trade. This assumes your trading
plan has at least a 10% edge and that it suits your personality.
If your plan does not have an edge, then money management
will not help. In this case all effective money management will
do is help you lose money more slowly.
regards
ray
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Name: ray barros
Tel : 61 2 9267 3470
Fax : 61 2 9267 3478
101/25 Market Street
Sydney NSW 2000
Australia
E-mail: ramon@xxxxxxxxx
Date: 08/11/97
Time: 08:35:08
This message was sent by Chameleon
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