2% Rule(s)

[volpri]

5 bad days = -20%. Two bad weeks = -40%. Can you afford that ??

Hello. If I had two bad weeks I might make haste and go work at waffle house.

 

[Businessman]

To appropriate a little advice from the cinematic masterpiece "Tropic Thunder," you never ever go full kelly! Edward Thorp cautions against this strongly in his chapter of "Hedge Fund Market Wizards."

But that is advice for a hedge funds. Because customers wont be happy if you blow all their money.

Now for trading small personal accounts (small relative to your income), you effectively have an infinite bank roll and can bet up to 100% if you want to.

By infinite i mean, if you have a job or other income, you can keep recharging a small account forever (or until you die).

 

[newwurldmn]

But that is advice for a hedge funds. Because customers wont be happy if you blow all their money.

Now for trading small personal accounts (small relative to your income), you effectively have an infinite bank roll and can bet up to 100% if you want to.

By infinite i mean, if you have a job or other income, you can keep recharging a small account forever (or until you die).

you should look at your account as the sum of the present value of your income as well.

 

[ironchef]

By playing with simulations
Found out full kelly is very risky (Ruin)
While half kelly provides way more safety
A lot of risk takers advise for half the criterion
Especially since the inputs are dynamics & approximations.

True.