I just saw this video by John at the High Probability Trading blog (also embedded below… be warned, there’s a lot of profanity in it). It’s painful for me to watch. I’ve certainly had my bad days in the market but never anything like this:

I hope he gets through this OK. Perhaps […]

Michelle B submits:
Sylvain Thibault commented:
I read somewhere you never give back more than half your profits on a trade. How do you trail your stops on a day trade eg: yesterday’s MXIM.
Perhaps you are referring to this excerpt from the StockTickr interview:
StockTickr: What’s your exit strategy for winning and losing trades?
Michelle: My […]

This guy is intense. Forget those soothing affirmations, playing this every morning will surely keep you disciplined…

and in case you don’t know who the soup nazi is…

Tags: Risk Management

Michelle B submits: Several bloggers have commented recently about CNBC’s excitable coverage of the Dow Jones Industrial Average setting a record. Since a price-weighted index containing a very small number of stocks is fairly insignificant in the trading world, why did CNBC latched onto to this relatively unimportant event?
During the time of the technology […]

I finally got around to reading about the blowup of Amaranth Advisors hedge fund. I’m astounded that some of these supposedly sophisticated hedge funds apparently have no clue about such basic concepts like money management, position sizing and ‘risk of ruin‘. The disaster at this fund is a great illustration of why I’ve […]

There seems to be a lot of controversial over the concept of R-Multiples. I’ve been seeing people complain about them for months now and I’ve been meaning to write a post about “R”. I really wanted to do it last week but I’m glad I didn’t get to it because this week a […]

Here are my responses to the comments left on last week’s “position sizing considerations” post:
nonadamas wrote:
1. What about equipment, ISP failures, do you always write down your trades?
2. What kind of backup set-up do you have?
3. Brokerage problems, problems at their site or with their people making errors?
When I started active trading, […]

I want to share & expand upon the answer I gave to an email about position sizing the other day. Justin wrote:
[SNIP] After reading your article on 100 R i can now see that it would benefit me to daytrade and use 1 R per trade instead of my old 2 R per trade […]

The other day Marcos asked where he could find a position sizing spreadsheet. I just uploaded mine in case anybody else wanted a copy. It’s nothing fancy at all and it’s based on the percent risk position sizing model. Just enter your account equity and the amount you want to risk per […]

What a coincidence (do coincidences actually exist???) that just as I’ve been thinking more about money management Worden has had a run of users writing in about money management. Here are some of those letters which were published in the Worden Report (emphasis & links added by yours truly):

Tags: 80/20_Rule, Exits, Expectancy, Kelly-Criterion, Money Management, […]