Re: Money Management Strategy question

["ramon" <rbarros@xxxxxxxxxxxxxxxxxx>]

Hi Ron

A rough and dirty way to calculate the
probability of returns is to multiply the probability
of return by the return.

Thus:

First      is 10% (10*1)

Second is  25% (50*.5)

Third     is   0% (100*0)

>From here you should be able to work out
the answers to your questions.

regards

ray

R Barros
101/25 Market Street
Sydney NSW 2000
Australia

Voice:   61 2 92673470
Fax:       61 2 92673478
E-Mail:  rbarros@xxxxxxxxxxxxxxxxxx

----- Original Message -----
From: Ron Warshawsky <rwarsh@xxxxxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxx>
Sent: Friday, August 13, 1999 10:12 AM
Subject: GEN: Money Management Strategy question



RTs,

 Can you please, help me with this question:

If, assume, that exists 3 below mentioned trading vehicles:

First      : 10% monthly return, guaranteed
Second  : 50% monthly return, has probability to lose 50% of investment
value
Third     :  100% monthly return has probability to lose 100% of investment
value

Then, what will be the best (in %) portfolio allocation and in how trading
profits has to be redistributed?

Thanking in advance,
  Ron Warshawsky