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Kelly does that implicitly. The problem with Kelly is that the public formulae were designed for casino games, not for trading. Trading is not a casino game: there are no fixed probabilities and no fixed payouts. So the problem is more complicated but it can be expressed explicitly and even...

So how do you size your bets? Or trades, as the case may be.

This video is stupid. Chances are none of these people have ever heard of the Kelly criterion, much less know how to apply it. Obviously his $10-for-$10 bet is a nonstarter, except for degenerate gamblers. His $12-for-$10 bet requires that I have a minimum of $10/(.50-.5/1.2) = $120 of...

This thread reflects the cost (opportunity cost) of not using optimal position sizing. It must be frustrating as hell to be stuck in the 2% rut, to see a great setup come along, and to not be able to properly size your trade to take maximum advantage and to know you're leaving serious money on...

Sorry, what I meant was how do you determine enough leverage without applying too much? TIA.

Please expand on "appropriate use of leverage."

They charge for what they consider the better ones but there are over 50 strategies that are available for free and you don't have to sign up to see them. Just use the screener. That takes the OP out of the spam category and makes it a public service.

http://www.elitetrader.com/et/index.php?threads/tastytrade.283002/

Nothing new here. This is just the ol' beginners' luck. Newbies to any activity often enjoy success at the beginning because their minds are stress-free: unconcerned about doing things "the right way." Only after the inevitable failures comes the self-doubt and the hesitation. The goal --if...

The expectation is 1 unit per trade: 0.5*(+3) + 0.5*(-1) = +1.

Oy. This is why the competitive nature of the markets is confusing. It is by no means direct competition. As I stated earlier, the person taking the opposite side of your entry is almost never the same person taking the opposite side of your exit. And all three of you may turn out to be...

For futures and forex, how could it be otherwise? Commodities and currency do not produce value like companies, they are assigned value. And your gain in commodities or currencies absolutely means at least one somebody else's loss(es). Likewise your loss in commodities or currencies means at...

The problem with the zero-sum game description is that it completely ignores the fact that a trade consists of two transactions: an entry and an exit. The trader who takes the opposite side of your entry is almost never the same trader who takes the opposite side of your exit. And it is entirely...

What combines other than TopStep are there? Keep in mind that not everybody trades futures, or even wants to.

How are you sure the OP is surf? TIA.

Your statement "capital and the prudent use thereof" is all about sizing. It completely ignores the timing side of trading, which is where true edge begins if you're to have one. Knowing when to enter and when to exit a trade gives you a big advantage over those who are just guessing and winging...

No. First you won't be the only one doing it. Far from it. Everybody has heard these rules. The fact that a few reckless types won't heed it won't uniquely advantage you, it will also advantage most of your competition. Hardly an edge for you. More importantly, trading strategy is composed of...

In the context of trading and other competitive arenas, the word "edge" is a slang term that means advantage, as in an advantage over your competition. Capital is not an advantage unless you're trying to corner an illiquid market. Capital is necessary, yes (so is breathing), but that doesn't...

Just an addendum to this excellent post. Trading has been promoted by many scammers as a get-rich-quick scheme. It looks as easy as videogaming to many people. Scams like Wizetrade are specifically marketed as it being that easy, if not easier. So no wonder if some people come here with the...

No, it isn't. That isn't even the traditional definition of edge. Without timing (knowing when to enter and when to exit a trade), there is no edge aka positive expectation. And without positive expectation, all the "risk/capital management" in the universe won't save your trading account...