Let me throw another analogy your way: Ryan Jones is like Donald Trump. Donald Trump is a real estate billionaire but he sells some pretty ridiculous how-to books. You probably won't be hearing "Donald Trump isn't successful in real estate because he's selling how to get rich in real estate books." Once again, those who can do, do, and sometimes do other things to make even more.
what is so special about his money management algorithm? Everyone should use a unit concept in buying and selling. Period. Use the ATR and calculate the unit for stocks and especially futures. This is no brain surgery.
Yeah I guess that if a successful trader is willing to give up the freedom trading can give, and commit to a teaching business, for the extra cash, then that is fine. Yannis, if you are are successful with your trading and you are willing to spend some money on testing new ideas offered by gurus, then that's fine as well. REGARDLESS - "Make $100,000 a year by being a part time mentor" and "you are one of the selected traders that get this offer" surely sounds like snakeoil to me. Ryan Jones or other gurus can go about their business.. I don't mind.. doesn't bother me.. but his promotion surely is the stuff for an interesting post... interesting to see how far snakeoilism goes..
andrasnm, To answer the question in the first part of your statement (assuming that you are really looking for an answer ) if I remember it right, all FR adds over and above what FF teaches is that, if, for example, your account has $15,000 and you are trading, say, 3 contracts, then before you add a fourth contract you have to wait until you make your pre-selected profit amount, say $3,000 profit PER CONTRACT (total $9,000 profit, account level=$24,000) instead of taking that step after you just make $3,000 profit total (at which point, your account would be at $18,000). Takes you up the ladder more cautiously. Coming down, you also preselect an amount of profit per contract to maintain, say $2,500, and, so, if your account peaks (between trades) at $26,000, when you cross the $22,500 level, you drop back down to 3 contracts at the next trade. Which has the effect of lowering your exposure to loss fast or slow, the way you think it's best. Your ability to match the right growth level (in this example, $3,000) and the correct INDEPENDENT drop level (in this example, $2,500) TO THE MARKET AND THE PREVAILING CONDITIONS, can help you win or lose. Studying indicators such as ADX or D+/D- or ATR etc, especially as they change, can help some traders do that better. Ryan's software mm tool, which I bought but never used (yes, I know...), helps you select optimum variables, or, at least, promises to do that for you. Ryan's math in his book shows that his method is a safer and more effective way of managing your money as you trade, especially in the beginning. Other traders/authors agree, but, sometimes, the various arguments on risk/reward variables become a bit too religious for my taste real quick and I drop off. Intuitively, for the way I think, FR is better than FF, especially as it forces the trader to be thinking PER CONTRACT and also as it keeps those two key variables independent. Even Larry Williams agrees with Ryan on that main issue, although he disagrees on some other secondary (but still important) stuff written in Ryan's book. Maybe I've missed a significant detail here, or, maybe I've changed something from what I read in Ryan's book years ago, but this is how I understand and practice mm/FR. I think it's pretty close. Now, have you heard of Tim Cho, the founder of the TCI trading school and methods/tools? His mm guidelines, authored before Ryan's book, present the same philosophy. Go figure... at any rate, I like, and have benefited from, them both
ditto what Yannis says plus... What you have described is one method of MM. There are several others each with its own advantages and disadvantages. Surely the best option is to test them all and see what works for you?
mmillar, Yes, you are right, I agree. PS. And, speaking of gurus, my "transcendental" question is, what good is FR/FF/... money management on my part if, at the end of the day, it's my wife who gets the money?
success - yet people manage to overcomplicate it and make it darn confusing. The ATR and turtle 1-2 percent rule IMHO and pyramiding works for stocks and commodities. It is not necessary to use it only for trend following... It seems Ryan reinvented the wheel....
"Lying for a Living" - love the title! Gary, you got a link to that thread by any chance? to 50cent: I believe Vad from RealityTrader is "legit". What did he do that was "un-seemly of a gentleman"? Don't know about Jim Wycoff.
Well nothing too big I guess.. not much to make a fuss about. I also believe that Vad is legit (i.e. a successful trader), and also don't know anything about Wyckoff (except that some people consider him a legend).
richard wyckoff, from the turn of the century. published a newsletter called the ticker... had several books reprinted (how i trade in stocks and bonds, stock market techniques one and 2, wall street adventures through 40 years) and one under the name "rollo tape", for "studies in tape reading". i consider his materials to be 1/2 a step behind _reminiscences_ for essential reading.