murray t turtle
Registered: Dec 2001
07-02-12 07:48 PM
Quote from market_man76:
I you have a positive expectancy over the course of all trades it matters not whether 70%/winners 30%/losers or vice versa with 30%/winners 70%/losers. or any other combination.
If the end result is a positive expectancy then money management(AKA position sizing) can help the account grow astronomically.
If the end result is not a positive expectancy then money management/position sizing will not save it.
So step one is make sure your trading has a positive outcome overall through the life of your trading activity. whether you trade a system or discretionary.
Only then can you move to step two, which is to size your positions based on the value of your account using some method that you are comfortable with, suchs as fixed fraction, fixed ratio or rules that you come up with.
Nice,clear, crystal clear points.
But i think Dr.Van Tharp[book]is right in that a 50/50[excuse the word ''random ''entry can be profitable '' Now, dont think he was recommending a ''random ''entry . Nor would i recommend a ''random''entry. LOL
Even though in the 1998, 1999 trends[200 dma] which is near when most of his books were written; lots of stuff worked , like 2008, worked well. Wisdom is profitable to direct.