Sunday, December 4, 2011

Money Management

I was reading the money management by Brent Penfold; it’s from the book “The Universal Principles of Successful Trading”.

Shy… cuz I have been reading this book from early of the year, initially I was reading fast… but this chapter stopped me from moving forward. To me it is very academic and it involves many many mathematic calculations, some strange terms... standard deviation, drawdown, catastrophic losses, value payoff…

I will only bring the book out with me whenever I go to the hair saloon, and friends… who goes to the saloon every day? I go there may be once every three months = (

This chapter although is tough for me, yeah, I always thought money management is tough, although I know how to calculate my risk, risk 50 pips, risk 2% of my capital… it is a very very straightforward thing, but I always telling myself, Money Management is not as simple as that… to be honest, I think I am constantly sending the wrong message to my mind.

Finally, I have chosen William Fixed-Risk Money Management, yet arrive higher profits, but with higher volatility too… whatever. Key: Trade more contracts when you are making profits, and trade less when you are losing. Van Tharp share the same thought. Super Trader is another great book that keeps me on track.

However, in turns, by completing this chapter, it gave me insight.

Compare to my past trading experience in Stocks, when I start trading FX, I abandon what I have learned in the past, and re-learn this new market. No matter what market it is, survival is always the main topic. How do we protect our capital and survive in the market is a very important practice, it requires discipline, patience, and courage.

I love my new hair color, and my short fringe.

You may want to read this:

No comments:

Post a Comment