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Traders Toolbox: Money Management Part 2 of 4
Crucial but often overlooked, money management practices can mean the difference between winning and losing in the markets.
-Amount Of Money To Risk- It’s difficult to come up with hard and fast money to risk on different markets and trades. For our purpose, though, it’s best to think conservatively. Although some studies suggest initially allocating equity in broad terms of original margin (40% to 50% of total equity committed to the markets at a given time in the form of original margin, 15% to a particular market, 5% to a single trade, etc.), many traders consider these percentages too high, and do…
26Nov2008 | INO | 0 comments | ContinuedTraders Toolbox: Money Management – Part 1 of 4
Crucial but often overlooked, money management practices can mean the difference between winning and losing in the markets.
Plenty of books, manuals, and software packages will help you form and opinion of a market, but not many will tell you how to trade once you have decided to get long or short. The goal of money management is to increase the odds of high quality trades. And as we’ll see, leaving the money management variable out of your trading equation can lead to ruin, even if you’re correct about the market direction.
In a broad sense, money management can encompass those elements…
24Nov2008 | INO | 0 comments | ContinuedStock Market Investment Advice: Beware Wall Street’s “Tower of Babble”
The original Tower of Babel was an enormous structure intended as the crowning achievement of the ancient city of Babylon. According to the Book of Genesis, when Yahweh discovered that it was not built for his praise and worship, he scattered the citizens of Babylon throughout the earth, confusing their languages.
Today the “Tower of Babble” is not located in Babylon but rather on Wall Street. That’s where economists and analysts put on a serious air and explain their own stock market investment advice to us plebes what is about to happen with:
-The economy
-Currencies
-Interest rates
-Commodity prices
-And the stock market
Except, as…
18Jul2008 | Investment U | Comments Off | Continued
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