Late last year, I asked a reasonably established trader friend if he would take 60% return per annum on equity with low risk strategies (aka close to no equity loss for the year). He was reluctant as he spiraled towards 5 to 10% return on any single trade, perhaps even 20% on a good day. His risk factor would be […]
The Beginning Trader A few days ago, my friend (a reasonably new trader) was lamenting over his losses and mistakes. He felt miserable. If not for his naturally glowing persona, I presume he would have fallen into depression. I wish I could help him, but really I couldn’t do more than lend him a listening ear. There is no secret to […]
Today marks the 3rd anniversary when I left a full time job and started trading. I have penned this article as a mini celebration. Someone theorized if we reverse a terrible trading system (eg. one with a 20% winning probability) and buy when it signals to sell, we should have a very solid trading edge with an 80% win rate …… sorry […]
Money management. Most people have heard but care little to implement this wisdom correctly. A stop loss is not money management. Position sizing is not money management. These two are merely arms and legs of money management. Ralph Vince conducted an experiment with 40 Phd students using a computer trading game that gave 60% winning odds to the player (which […]