The hardest part with the Kelly criterion is gettin' the numbers right. There are many wizards that do use this criterion for bet sizing. We're told to bet half of it because for safety reason. It's better to under bet than to over bet ^^ In the end it does just maximize growth over time. If you don't know how to use it then bet a fixed % Less than 2.5% is a good one to bet with.
to risk 5% of the account is a good way to start (I'm guessing you new in trading because the size of the account), it's important to put good stops according to this amount. what works for me is to put stops after a high liquidity level and I use Bookmap software for that. this cuts the range of my stops to a minimum and I can control better at my risk plan.
I am definitely not new to trading just doing it in small amounts due to having no job or any success growing it. Those small but painful losses over the years has just made me realize I need to implement a risk management strategy. (I don't think many new traders think about that stuff until they bust their account at least half a dozen times.)
%% Exactly; 1% is noise, for swing/position. Some low volume or float stock gap 1% intraday LOL-LOL IBD founder has a good goal/.guideline ; risk 7 or 8% to make 24%.Best way to daytrade, some times,, = risk part of your investment profits................................
Kelly has nothing to do with improving win rate, it is all about bet size and to avoid/minimize risk of ruin.
IMHO, first thing first. You first have to find your expectancy. Once you have that, Kelly is simple. If your expectancy is negative, Kelly won't help you. You go broke slower.
%% NOT just risk management, maybe you can figure out/profit with what a bull market is??; Better have more in a business plan than simply control risk/losses. AND you want the truth or a polite answer.?? [1]Once should be enough to blowup or grind down an account; it means WE WERE TRADING WAY TO BIG. [EVEN a super percent like 88%, JAN Stock Traders Almanac forcaster, can go like 1987, or 2009.And 88% can be wrong for years in a row;another reason to trade /invest reasonable size...………………………………………………………………………………………... Hope this helps; it helped me a lot.
1. Exploit a bias. Trade Positive expectancy situations. 2. Bet optimally to avoid ruins. Max expected log of growth. Risk is 1. Not having a well defined strategy Risk is 2. Trading the odds against you Risk is 3. Over betting If you can’t beat the odds : Broke If you don’t master your craft : Broke If you bet more than optimally : Broke
%% Ever wonder why they want you to have more/more>> than $25 k to daytrade,GotherL?? And that IS why you cant go by your feelings, no loss on $1,000 is a big one , false feelings . Most anyone hates to lose even a penny, but my feelings tend to try to get me out of trend WAAAAAAAAY to early. Most making millions /billions in the market, are market makers+ investors. Maybe Don Bright Day Trading Co could help. Hope this helps; it helps me...………………………………………………………………………………………….