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Hi Phil,
I am very familiar with Fixed Ratio and its developer Ryan Jones at Rumery
and Lehman. I believe Fixed Ratio is a fantastic Money Management Concept.
For instance I traded a system last year starting with $25,000 and within
8 months had $145,000 using Fixed Ratio. The problem is that my system
failed and broke 2X its maximum DD forcing me to retire the system and
ending with an account balence of $62,000.
Fixed Ratio adds contracts at a fixed $ amount vs. a fixed %. You can be
very aggressive with your delta or very conservative. What you need (which
by the way everyone needs) is a system that has a CONSISTANT positive
expectation with frequent trades. If you have a system that is approx
50-60% accurate, < $10,000 historical drawdown, and an average trade(w/l/d)
approx $300-$400 Fixed Ratio will dramatically increase your profits with
only a slight increase in risk.
At 08:19 PM 5/12/98 -0700, Phil wrote:
> I got an advertizment from Rumery & Lehman today about their Fixed Ratio
>Money Management system. It seems to be a way of adding or subtracting the
>amount of contracts to trade to make the most profit with the least
>drawdown-risk? It shows unbelieveable returns using the Fixed Ratio method
>compared to trading just one contract. If anyone has any idea of what fixed
>ratio is, I would like to get an overview of what it is and how it works
>etc. It looks to be a better and safer way to know when to add or subtract
>contracts in trading to get the most profit with least risk? Anyone have
>any ideas?
>
> Thank You,
> Phil
>
Bruce Harrison
<mailto://trader@xxxxxxxxxx>
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