Published in March 8th, 2010
BarroMetrics Views: Risk Management
What is risk management? For me it’s a set of tools that balance maximization of profitability with minimization of risk of ruin. It’s made up of two categories:
Trade Management: the strategics and tactics to manage an initial exit (when we first place a trade) and the strategics and tactics to manage our […]
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Published in January 19th, 2010
BarroMetrics Views: Subjective Risk Management
In preparing for my talk on Risk Management sponsored by CMC Markets (see attachment: Art of Trading.pdf), it struck how important a role the subjective aspects are for Risk Management.
Our Vision and Goals set the scene for the driver of our Trading Rules (of which Trade Management forms a part; Trade […]
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Published in August 21st, 2009
BarroMetrics Views: Area of Competence
The other day I was on Bloomberg’s ‘Asia Confidential with Bernie Low’. As is the normal pattern with this type of shows, viewers are invited to ask questions of the guest commentator. Here you take pot luck with the questions: the viewers will tend to ask questions from their own mindset […]
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Published in June 16th, 2009
BarroMetrics Views: It’s Your Money, Husband It!
This blog focuses on highlighting the risks traders face when choosing brokers.
A little context: I view brokers as being in a fiduciary relationship and as owing a fiduciary duty to their clients. Ray, what in heavens name do you mean? It sounds like legal-eagle double talk!
Think of it in […]
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Published in March 4th, 2009
If there is a key concept that leads to trading success, it’s the understanding, integration and application of the Expectancy Return:
(Average Dollar Win x Win Rate) - (Average Dollar LosS x Loss rate)
Where:
A$Win = the average of the dollars won in our winning trades
Win Rate = the total number of winning trades/sum total of all […]
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Published in December 12th, 2008
One of the things that I learned from Pete Steidlmayer was to take calculated risks. Not that I am risk averse - that too was something I had to learn: the times when risk taking is unjustified.
What I learnt from Pete was that to succeed I had to take calculated risks and not to just […]
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Published in December 11th, 2008
After my presentation at the Share Investor Expo on December 6, I spent some time speaking about the fallacy of wanting a high win rate. I know that some ‘did not get the point’ - this blog is for you.
The key to investing/trading success lies with the Expectancy Return Formula:
(Avg$Win x Win Rate) - […]
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Published in November 24th, 2008
I was going to start a series on the markets tonight. But, Peter Whitnall’s comment on the Ebb & Flow raised quite a few e-mails.
In this blog, I’ll answer the question: how do we know when to increase and decrease our position size?
Well first off, we can never ‘know’ but we can make solid guesses. […]
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Published in August 8th, 2008
I am constantly surprised by the expectations of seminar participants. Too many seem to believe that at the end of the two or three days, ‘insto-presto, I’ll be one of the world’s best traders!’ It doesn’t help the newbie that too many educators encourage this belief.
The fact is expertise will take time. The very best […]
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Published in August 7th, 2008
One of the questions that was repeatedly asked at the CMC presentations was: How do you know when to take profits?
The background to the question was the story I told about a relative whose win rate is 90% over a trading period of 30 years. Impressed? Well, what if I were to tell you that […]
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