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 […]
continue reading.....
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) - […]
continue reading.....
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. […]
continue reading.....
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 […]
continue reading.....
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 […]
continue reading.....
Published in July 9th, 2008
At the end of the day our success as traders is based on the equation below returning greater than 1:
(Average $ Win x Win Rate) - (Average $ Loss x Loss Rate) = >0.
To produce the desired result we need to consider three factors:
The Win/Loss Rate. Elsewhere I have postulated why the Win or Loss […]
continue reading.....
Published in June 11th, 2008
Index speculators, a new breed
from http://awanginvest.com/?p=415
It is educational for readers/traders to understand why commodity prices keep rising in spite of ample supply. Please read the testimony and you will be enlightened!
June 10, 2008 – 10:58 am
michael-masters-written-testimony
This excerpt of a Testimony by Michael W Masters before […]
continue reading.....
Published in March 28th, 2008
So far we have completed the way I assess position sizing. The next step is to manage the trade.
The first step is to identify the entry, initial stop and core profit exit- this is function of your plan.
The next step is to assess the trade’s risk-reward. Because I use the Rule of Three, I assess […]
continue reading.....
Published in March 27th, 2008
In the last blog, we completed the formula for a normal position size and now we come to “Ebb and Flow”.
I discussed the idea briefly in the Art of Position Sizing. As Pete Steidlmayer said: “Risk is managed by knowledge - knowledge of self and of the markets”. ‘Ebb and Flow’ depends on having […]
continue reading.....
Published in March 26th, 2008
In this blog, I’ll be looking at the way I would calculate my position size using a dollar criteria.
The inputs are:
The average dollar win per trade.
The average dollar win on a one-contract basis.
The maximum dollar loss
The volatility of the market as measured by the stop location. My stops are based on swing extremes. For this […]
continue reading.....
