Money management - the holy grail

Discussion in 'Risk Management' started by oilfxpro, Feb 21, 2012.

  1. #21     Feb 26, 2012
  2. robinhood is cool if you are the one who decides who to steal from. If you always steal from the rich, then pretty soon the rat learns it's a bitch to be rich.

    I like the torah, "Thou halt not steal" If you want to get into that new testament crap then you can have a war over who we should steal from.
     
    #22     Feb 26, 2012
  3. Robin hood is an organization. They don't steal from anyone. I can understand your confusion from "robinhood" the story where he steals from rich and give to poor.

    "Jones is the founder of the Robin Hood Foundation, a philanthropic organization mainly backed by hedge fund operators. He founded and was the Chairman of the Board of the Excellence Charter School, the country's first all-boys charter school, located in the Bedford Stuyvesant neighborhood of Brooklyn, New York. He founded and chaired the Bedford Stuyvesant I Have A Dream Foundation, which puts local students in collegesz'
     
    #23     Feb 26, 2012
  4. well, actually I like Robin Hood and didn't care much for the Sherriff of Nottingham, but stealing is never a good long term idea. otherwise, yes you are correct, I was confused, I didn't know they were giving their own money
     
    #24     Feb 26, 2012
  5. Have you a simple answer on the mm of a casino owner , and how do traders compare with their 2%?

    Does any one know this simple answer?

    http://www.swing-trade-stocks.com/money-management.html

    You are all going round and round in circles.
     
    #25     Feb 26, 2012
  6. I know, But I tried, no I don't know the answer, but I'm willing to bet it is simple
     
    #26     Feb 26, 2012
  7. Let us assume there are 150 gamblers in the casino , each with $100 to bet .These are random numbers.Every hour 50 betters leave.

    The casino has annual profits of $10m and capital of $100m.
     
    #27     Feb 26, 2012
  8. The market is efficient and edges are regularly eroded , there are thousands of highly sophisticated algorithms , and it is very few traders who have an edge.

    95 % plus traders lose , it is a well known fact.

    Sound sophisticated money management can improve results.Money management and position sizing can improve profitability , if applied appropriately to the following

    80 % of trend on 1 minute charts fail on longer time frames.

    Technical analysis is junk science , humans are not good at processing good clean information let alone voodoo science.

    Traders are highly over leveraged in their money management , compared to casinos and their risk reward.Traders are encouraged to trade like a casino.

    Trading is about probabilities with loads of false signals

    http://www.elitetrader.com/vb/showthread.php?s=&threadid=234519&perpage=6&pagenumber=1

    Betting the unknown outcome is against psyche

    http://www.elitetrader.com/vb/showthread.php?s=&threadid=236978&perpage=6&pagenumber=1


    The main problem with traders is their money management , it does not cater for the above fallacies of trading.Money management is the holy grail ,it is applied inappropriately to trading , and most et ers are deluded.
     
    #28     Mar 3, 2012
  9. It is one thing to say that traders do not exercise good noney management and another completely different thing to say that money management is the holy grail. It is a fallacious implication doing that.

    Most of the same traders will lose even with good money management. Their methods are flawed.

    For making money you need both the edge and the money management. Teaching just money management to people is the easy route to deceiving them ans selling them hopes and dreams. It is like teaching someone how to fly a plane at 35,000 feet without teaching him how to take off and land.
     
    #29     Mar 3, 2012
  10. with perfect money management (no mistakes) you should be able to breakeven minus the spread and commissions

    add to that random entries

    add to that random exits

    add to that random additions

    add to that random subtractions

    and over time, you should break even minus the spread and commissions

    10% of the time, override the random with something you think looks better than random (that's what I call "reading the market")
     
    #30     Mar 3, 2012