what risk does most Manasged money take?

Discussion in 'Professional Trading' started by chipmunk, Sep 16, 2012.

  1. what risk per trade does most Managed money (Mutual funds, Hedge funds, Pools etc) take?

    I have heard from 0.1% to 2%.
     
  2. Most mutual funds (and long only hedge funds too for that matter, which constitutes the majority of equity-based hedge funds) don't even recognize "risk per trade" as a legitimate theoretical concept.

    The typical long-only manager's conception of risk management is "picking good stocks," maybe selling calls on occasion, and that's about it.

    And a lot of the long/short funds are out and out ballers too, with no real concept of true risk management.

    Look at Paulson or JAT capital for example - big up years, big down years to follow. Those guys are willing to endure 20 to 50 percent drawdowns in the name of conviction.