osition sizing is that part of your system that tells you “how much†throughout the course of the trade. And, assuming you have a positive expectancy system, that variable, along with your personal psychology, controls about 90% of the variability of your performance in trading. THAT’S HOW IMPORTANT IT IS….
Category Archives: General Forex
The Importance of Position Sizing
I did a retreat with one of the world’s greatest traders in 1989. At that retreat he talked about a simple trading system. It was a system in which you flipped a coin. If the coin came up heads, you won twice what you bet. If the coin came up…
Every Trading System Can Be Described By the R-multiples It Generates
Last week I talked about determine your initial risk for each trade and how you could express your profit and losses as a ratio of that initial risk. I recommended that you always have a bail-out point before you enter into a trade, but if you haven’t done that then…
Hank Pruden on "Behavioral Finance" and Technical Analysis
Hank Pruden’s theory of “Behavioral Finance” proposes that human flaws are consistent, measurable and predictable, and being aware of and utilizing this phenomenon can benefit a trader. “For the better part of 30 years, the discipline of finance has been under the thrall of the random walk\cum efficient market hypothesis….
Global Equity Markets All Mixed Up
Global Equity Markets were mixed across the board yesterday. In the U.S, the DJIA recovered most of its losses after losing nearly 100 points following the poorer than expect housing data numbers.