SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Trading From Main Street.
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Brandon who started this subject5/11/2001 1:45:55 AM
From: Brandon   of 226
 
Something every aspiring trader must have a good understanding of is money mgnt. Its a subject not addressed often enough and it may be the single most important mechanical aspect of what ever "method" you finally use. I don't claim to have the best method in the world, but what I do have is good money mgnt and that keeps me in the game.

Understanding the principles of risk and and money mgnt is more important than anything I could ever teach you about a method, because the simple fact is that if you run out of money you cant trade any method. A trader with poor money mgnt skills could be "right" on 90% of his or her trades and still loose money, while a trader with proper risk control and money mgnt skills can make a nice living being right only 1/3 of the time. Studies have indicated that money mgnt accounts for up to 90% of the variance in the performance of various fund managers.

I don't worry about making a million dollars a year. I focus on taking good trades and keeping the risk acceptable. While this may mean I dont make a million dollars this year, it also means that I have a good chance of being around in 10 years. My risk control model calls for never risking more than 1/2 of 1% of my account on a daytrade and never more than 2% of my account on a core or swingtrade. This is my insurance policy for longevity. If I am daytrading with 1/2 of 1% risk and am wrong 20 times in a row the drawdown on my account will be less than 10%. When you combine this kind of risk control with high reward setups, you can trade for as long as you want.

B
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News