The Great Coin Toss Experiment II Message Board

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Strategies & Market Trends : The Great Coin Toss Experiment II

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To: Sojourner Smith who wrote (179)	6/17/2003 6:30:04 PM
From: bbgold	Read Replies (1) of 188

Hi SS, If you have a sizeable account then you might want to drop a post to Tom Veale and look into AIM. It is an interesting concept and has been providing him with a comfortable living for quite some time. Member 3168285 investorshub.com Here is another interesting concept on wealth building that started with a relatively small investment but managed to have substantial growth through the use of good stop loss placement and cyclical stocks. investorshub.com I do not venture over to SI often so I am not sure what might be available here. iHub is a sister site now so it would not hurt to give it a view. I have read quite a few different views on maintaining a profitable and growing account and in my opinion the most successful ones have some type of position sizing and risk management through stop losses or hedge trades. I think that most who have become relatively successful have dropped out of posting though, or started charging for a service. I too have been hit by some losses the last three years by not using good stop loss or position sizing limits. Most of my losing trades also did not have any type of a hedge. Whether looking into trading stocks, funds or options I believe that you should definitely give some thought into how to hedge any position. Position sizing is the start but as you mention a gap up or gap down can still offer a sizable loss if against your position. I have moved to trading only options as they can still offer decent returns with limiting your risk through small positions. They are also usually easy to hedge as you can set up an opposite position to your initial trade as a hedge if uncertain. Trying to determine a stock or index direction is indeed a part of determining which position direction to trade. Something that Bernard Ng has been working on with the MKTSS board, which I participate on. investorshub.com I cannot comment on our success ratio as the board is primarily geared towards market direction and not pinpointing specific trades. We have had comments that the board and the website have helped others with positive trade decisions though. I am still working how best to determine a position size and stop limit for most of my trades and so far the only way I have found to limit my risk is to limit the amount of money that I put into a trade. Currently I only trade options contracts with less than $1000 committed to each trade, no more than two positions open at one time also. Usually the initial trade and if needed some type of hedge. Not having a hedge was costly last year. I am hoping that with good money management and position sizing I will be able to achieve a profitable outcome over time. It really is an entire subject when getting into position sizing and money management though as it can be different depending on personal account value and risk tolerance. I have not seen a good system that would cover the topic for any type of trading account and risk level. The 1% rule definitely seems the most conservative and practical though. Do you have any links for boards, websites or seminars that you have found useful? Most that I have found deal primarily with Trading and little with risk management. I did attend a free seminar by Alexander Elder at one time though and his approach to position sizing and risk management was interesting, very similar to the 1% rule. I hope that you can find the answers to some of your questions SS! I keep asking them also. Sincerely, Bob :^)

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