Archive for March, 2008
Monday, March 31st, 2008
ES Comment
With no major news reports until Friday (Non-Farm), I thought it would be a time to revisit the ES.
Unless we can close at or below 1270 basis cash, the 12-month swing (yearly trend) has still to confirm the Upthrust sell signal. The 13-week (quarterly) swing in the meantime has to complete its Whole Point Count; […]
4 Comments » - Posted in Written Plan by ray
Friday, March 28th, 2008
Risk Management 5
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 […]
4 Comments » - Posted in Money Management by ray
Thursday, March 27th, 2008
Risk Management 4
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 […]
1 Comment » - Posted in Money Management by ray
Wednesday, March 26th, 2008
Risk Management 3
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 […]
1 Comment » - Posted in Money Management by ray
Wednesday, March 26th, 2008
Important: Aussie Broker Retraction
An important announcement: In an ealrier blog, I made the statement that clients of FX brokers were protected in Australia against broker malfeasance. I have received advice that this is no longer the case. There is NO PROTECTION should a broker fail to segregate accounts. So there is no advantage opening an Aussie FX account.
The […]
1 Comment » - Posted in Miscellaneous by ray
Tuesday, March 25th, 2008
Risk Management 2
Yesterday I said that Money Management questions are dependent on:
The volatility of the market.
The trader’s Expectancy Return
The Ebb & Flow of the market relative to the trader’s trading plan.
Volatility of the market can be measured in any number of ways. For example:
Perry Kaufman’s Efficiency Ratio
Ray Barros’ Ray Clock
ATR
Barros Swing Extremes
The concepts of ATR and Barros […]
3 Comments » - Posted in Money Management by ray
Monday, March 24th, 2008
Risk Management
I hope everyone had a great Easter break!
We went for a weekend trip to ATIC Kuala Lumpur - a trip that has great lessons for trading. The early signs were not propitious.
We arrived at the airport and there was no transport; we arrived at the hotel expecting a non-smoking room with a king size bed […]