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Dear Friends,
Let me put in my observations with real money. Over the last eight month
period I traded a breakout system with a basket of futures and commodities,
about 140 trades. While I had some good run-ups in equity I did suffer two
large drawdown periods. Inspecting these periods revealed it wasn't the
number of consecutive losses, but a series of small wins and larger losses
with the % losses exceeding the % of wins. That was the killer rather than
a large string of losses that makes a nasty losing streak.
Bottom line, the statistics of runs doesn't tell the whole story.
I hope this helps ... Marlowe
----- Original Message -----
From: Thomas Pfluegl <thomas.pfluegl@xxxxxxxxxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Cc: <ist@xxxxxxxxxxx>
Sent: Friday, April 14, 2000 8:46 AM
Subject: Re: [RT] Money Management: Consecutive Losses
> Hi Ira,
>
> Thanks for your answer.
> >Money management is only one part of any business. Like any other
business
> >you have to know what you are doing to be successful.
>
> In other businesses it's maybe only ONE part of the game but - in my
> opinion - in THIS business it's THE part of the game.
> Money management (i.e. position sizing) contributes at least 90% to your
> success, the rest are indicators, news, sentiment, etc. and - luck.
> I consider scale trading as something like the the opposite of good Money
> management.
>
> >Would you consider any other store front business a coin toss?
> Of course not.
>
> Regards & have a nice weekend,
> Thomas
> --------------------------------------------------------------------------
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> Thomas Pfluegl, Rudersdorf 8, A - 4212 Neumarkt
> Austria Tel. ++ 43 - (0) 7941 - 8106
> http://keplerweb.oeh.uni-linz.ac.at/trading/index.html
> --------------------------------------------------------------------------
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> Austria/Europe --> high mountains --> Mozart --> no kangaroos
> --------------------------------------------------------------------------
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>
>
>
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