Money Managment Strategies for Career Traders

Discussion in 'Professional Trading' started by will2205, Jul 11, 2007.

  1. will2205


    I just wanted to see what kind of money managment techniques people out there are using. I've witnessed a few guy's lose a lot of money due to their lack of money management skills and lack of displince with stops.
  2. will2205


    What percentage of capital is too much to risk in a single day. That is from a locals point-of-view? I feel 5-10% is the range I would feel comfortable with.
  3. When I first started trading which was a good amount but I needed to grow it to hit the big leagues to go total independent and had to be pretty aggressive ..... 12% to 15% sometimes well let just say I let things go over my head. Thank goodness those trades didn't go against me or I got pissed scared quick and took a small loss.

    Now I have become alot more risk adversed but making alot more though so now so it is around 7% to 9% nowadays.
  4. will2205


    Does anybody else in these forums wanna talk about something worth while? Instead of all of these "i'm a noob" or " how much money do i need" questions.
  5. Okay...

    You want some examples of absolute "detailed" position sizing techniques like "I enter X amount of my securities I trade based on the opening range of 1.7 ATR to 2.1 ATR with a stop at .08 ATR and exit 2.74 ATR. If it hits 1.9 ATR within 3 minutes of a 10 minute chart, I will add positions at increments of 1/5 ATR until I reach half my max of risk I will take on a position?"

    I don't know honestly if you want that really since having the exact answer to your question will not probably help you much. But what will truly help you is if you ask how folks come to the conclusions they come up with developing their money management algorithms. YOU WANT TO KNOW THE PROCESS INVOLVED in developing money management strategies.

    Oh man I remember asking the exact same question you asked with a few experienced folks when I began. Right there the guys knew I was a rookie and I got ripped. Well which was a good thing since from there I went and did my own research and testing and came up with something that I was comfortable with. That took about a few months. Oh the pleasure and pain I was going through. Looking back it was worth it.
  6. BJL


    i'm not running your average futures book, but..

    diversification and reasonable use of leverage (different levels for different asset classes) are the only techniques i use.

    don't use stops, don't use volatility adjusted positioning, don't scale in/out.

    i keep a tab on VaR but don't really use it. have done stresstesting on the strategies employed for the major disaster in the last 20-25 years.

    guess that's about it.