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Re: Fixed Ratio Money Management



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THE DOCTOR wrote:
> 
> When you do your analysis think of the cardcounter analogy.  If you want
> to see a classic example read Schwaeger's New Market Wizzards and read
> the chapter about Blair Hull.  CardCounter turned option trader...his
> firm is one of the biggest on the CBOE.
> 
> As a card counter Blair would lose most of the time....small manageable
> losses...but losers most of the time.  That gives him the ability to win
> big when the % are in his favor.  A succesful cardcounter will ante and
> fold far more often than not.  Many of the well know(and many of the
> less well know)success stories in options will lose almost all the
> time..then have a great year with one trade.  It is hard to be that
> patient, but.....


You are right about all this, except that it doesn't have anything to do
with fixed ratio MM.  Fixed ratio does NOT involve increasing bets when
the odds are with you, it involves betting the same percentage of your
bankroll every trade so that as you make profits your trading size
increases appropriately.

Eric