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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: gaj who wrote (7522)	3/19/2000 9:03:00 AM
From: TraderAlan	Read Replies (2) \| Respond to of 18137

gaj, I just finished the first draft of the money management chapter of my book. It was an interesting exercise since I consider that topic the weakest link in my on-line trading course. The bottom line though was that my discussion was somewhat limited because of a few revelations. First, money management depends on trading style, strategy and risk tolerance. The rules common to all sound more like religious parable than hard-wired tactics. Second, traders fail because they don't exercise risk management, not because they don't know what it is. They don't take losses when their signals, plans or strategies tell them to. They take entries that should be avoided and they act on emotion rather than logic. There is a tendency to criticize financial books when they don't solve or address that reader's trading weaknesses. It's clear to me (as a writer) that most traders have the same weaknesses and that a thousand books can talk about it but they can't fix the problem because it has nothing to do with a lack of knowledge. It arises from a lack of discipline. One of the reasons that Hard Right Edge gives away all kinds of trading secrets for free (or very cheap ;-) ) is that their value is limited to the trader that applies them. All the snake oil guys selling this same stuff in 2k, 3k and 4k weekends know this as well. All they're doing is working the trader psychology, i.e. charge a lot more for the same thing and the buyer will believe that there is greater value in it. Alan