The only "Holy Grail" is money management?

Discussion in 'Risk Management' started by crgarcia, Jul 31, 2008.

  1. Better to risk being out of a position than being out of the game. There's always re-entry and, failing that, there will always be another setup.
     
    #11     Jul 31, 2008
  2. Chili?
    :D
     
    #12     Jul 31, 2008
  3. eagle

    eagle

    Those two things - being out of the game and too many being out of a position make trader quit. :D

     
    #13     Jul 31, 2008
  4. gnome

    gnome

    There were prominent gurus who had covered shorts and gone long the Friday before... both technically reasonable.... looked like a possible "2X test with April low" on NDX.
     
    #14     Jul 31, 2008
  5. eagle

    eagle

    For some reason, I was breaking the stop-loss rule by always adjusting the exit point or rate and therefore it never get hit; I applied second rule called time-loss, meaning that if a single trade still show a loss, say after two weeks, then get the hell out. It's enough, too much damage to the psychology.

     
    #15     Jul 31, 2008
  6. gnome

    gnome

    Wherever and however stops are applied, they are at least somewhat subjective. But at some point before the loss is great, you need to say, "looks like I was wrong here", and go into damage control.
     
    #16     Jul 31, 2008
  7. I read once that he has admitted he does not trade. Do you know anything about it? If true, I wonder what value his statements carry, I repeat, if it is true he does not trade.
     
    #17     Jul 31, 2008
  8. eagle

    eagle

    True. But the fact is that no one can have a consistent accuracy of reading it. That's why money management plays as an armor.

     
    #18     Jul 31, 2008
  9. Absofreakinglutely AGREE!

     
    #19     Jul 31, 2008
  10. asap

    asap

    I agree is key aspect of successful trading but still not what leads to success.

    In fact, I know a couple of market makers that went down with ultra defensive money management strategies. It is well know that the edge derives from analytical and creative thinking rather than from solid well known mathematical rules. Obviously, long term success is based upon a constant need to improve, excellence and humility.

    After all, in the long run, all will end enventually bust. The difference is a small fraction will quit while they are up. I mean, it is not humanly possible to beat the market ad eternun.
     
    #20     Jul 31, 2008