suggestion: a new subforum talking about Money Management

J

joesan

Money management, together with trading strategy and trading psychology, are three mainstains of trading . After lurking in ET 3 years, I just realized that there is no forum dedicated to money management, or position sizing, is it possible to add one ?
 
Quote from joesan:

Money management, together with trading strategy and trading psychology, are three mainstains of trading . After lurking in ET 3 years, I just realized that there is no forum dedicated to money management, or position sizing, is it possible to add one ?
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Good suggestion.

I think a forum dedicated to Money Management would be good enough to also include discussions about position sizing.

Yep, three critical areas of trading that determines the success level of a trader are...

* Trading Strategy

* Trader Psychology

* Trader Money Management

Too many traders concentrate on the strategy aspect and don't spend equal enough time on the psychology nor money management aspect.

Take a look lately at all the threads with discussions and debates about does this work (strategy) and then when you start discussing that's only part of the puzzle...

Most can't handle it nor do they want to discuss the other areas of trading that determines our success or determines the success of our strategies.

How many trader have a strategy that has a positive expectancy in backtesting but poor results in real money trading?

It's those other areas they forgot about that's causing the problems in real money trading.

Mark
 
Maybe there is a reason why most traders focus on strategy part of the trading. Because position sizing algorithms such as fixed fractional or fixed ratio work best for strategies with low drawdowns or smooth equity curves. So to benefit most from position sizing, one need to first find a good strategy.

But there are other aspects of money management that one can benefit from, whether his strategy is good or just-so-so, such as diversification and portfolio selection.

Apart from position sizing and diversification/portfolio managment, I do not know if there are some other aspects of money management, but I will be all glad to learn if ET can create such a forum.


Quote from NihabaAshi:


Too many traders concentrate on the strategy aspect and don't spend equal enough time on the psychology nor money management aspect.

Take a look lately at all the threads with discussions and debates about does this work (strategy) and then when you start discussing that's only part of the puzzle...

Most can't handle it nor do they want to discuss the other areas of trading that determines our success or determines the success of our strategies.

Mark
More...
 
I would create a forum for that topic provided we could round up some existing threads that could be moved into that forum. If anybody could post some relevant keywords or phrases that I could do a search on, that would help me find some existing threads to populate the new forum with.
 
Thanks, that will be great.

As for the key words

money management, position sizing, diversification, portfolio selection, portfolio management, optimal f, fixed fractional , fixed ratio, , kelly formula, w/l ratio, R ratio,R multipe, equity curve, ryan jones, ralph vince,mark johnson, bob spears, monte carlo,van tharp,martinglae, anti-martingale

I am sure there are some other words, but even searching only these words will find hundreds existing threads




Quote from Baron:

I would create a forum for that topic provided we could round up some existing threads that could be moved into that forum. If anybody could post some relevant keywords or phrases that I could do a search on, that would help me find some existing threads to populate the new forum with.
More...
 
Yes ! what a good idea. I'm impatiently waiting for this new forum.

Do you want some more keywords ideas ? here are some :
  • "heat" - "system heat" - "portfolio heat"
  • "equity at risk"
  • "Turtles AND position AND Sizing"
  • "position management",
  • Edge,
  • "trade risk",
  • "trading the equity curve" (?)
  • "risk of ruin" - RoR
  • Scaling (in, out)
  • "trade expectancy", "system expectancy", "positive expectancy",
  • "win loss ratio" - "W/L ratio"
 
The new forum has now been implemented. I named it a slightly more generic "Trade Management" to encompass a broader range of topics like money management, risk management, portfolio sizing and diversification, etc.

Thanks so much for the suggestion.
 
Quote from Baron:

The new forum has now been implemented. I named it a slightly more generic "Trade Management" to encompass a broader range of topics like money management, risk management, portfolio sizing and diversification, etc.

Thanks so much for the suggestion.
More...



Baron, I think it is good news to all ET readers. My grateful thanks to you for putting this sub-forum into reality. It will definately bring me a lot of satisfied readings.
 
Thank you, and thanks some more... Every thread on edges, auto trading, trading, losing, winning, SCT, ad infinitum used to get buggered by the money management/ statistics gurus who, I am sure, know all there is to know and make loads of money.... just like all the economics gurus in the econ section...
 
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