The Successful Trader's Guide to Money Management

The Successful Trader's Guide to Money Management

by Andrea Unger
Released July 2021
Publisher(s): Wiley
ISBN: 9781119798804

Read it now on the O’Reilly learning platform with a 10-day free trial.

O’Reilly members get unlimited access to books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.

Start your free trial

Book description

Discover how to maximize the effectiveness of your trading techniques by applying the right money management techniques

Money management is a central element of trading the financial markets, especially in uncertain times. Yet investors often misinterpret the central concepts of money management. To manage risk and obtain optimal rewards from your trades, you will benefit from a deeper understanding of how the professionals manage money. The Successful Trader’s Guide to Money Management describes the operating methods that seasoned investors use. With this book, you’ll avoid the common mistake of focusing too much on entry levels and stop-losses, and you’ll learn to consider the impact of proper money management on your final portfolio results.

Successful traders focus on risk management, avoiding opening positions that are too large with respect to the total capital they have available. Packed with practical examples and with special focus on money management or position-sizing, The Successful Trader's Guide to Money Management offers a comprehensive coverage of widely practiced risk management models, examining their strengths and weaknesses. You will learn how to use the most effective operating models, including the Fixed Fractional, Fixed Ratio, and Percent Volatility models. This book also provides a thorough analysis of portfolio management models. These essential tips will nudge you toward a more winning position as you enter your next trades.

  • Learn how the professionals manage money and avoid common trading mistakes
  • Design a trading system that minimizes risk and maximizes reward through correct position sizing
  • Understand the most important money and portfolio management models, including Fixed Ratio, Percent Volatility, Fixed Fractional, and more
  • Equip yourself to trade smarter, individually or with a broker, on equity, derivatives and Forex markets

For individual and institutional investors alike, this book is a ticket to more solid trading strategy, especially in uncertain times.

Table of contents

  1. Cover
  2. Title Page
  3. Copyright
  4. Dedication
  5. Foreword
  6. Preface
  7. CHAPTER 1: Martingale and Anti‐Martingale
    1. 1.1 The Right Stake
    2. 1.2 Martingale
    3. 1.3 Anti‐Martingale
    4. 1.4 More Examples
    5. 1.5 A Miraculous Technique?
    6. 1.6 Conclusions
  8. CHAPTER 2: The Kelly Formula
    1. 2.1 Kelly and Co.
    2. 2.2 Conclusions
    3. Reference
  9. CHAPTER 3: A Banal Trading System
    1. 3.1 Analyzing a System Based on Moving Averages
    2. 3.2 Applying the Kelly Formula
    3. 3.3 Conclusions
  10. CHAPTER 4: Money Management Models
    1. 4.1 The Fixed Fractional Method
    2. 4.2 Optimal f
    3. 4.3 Secure f
    4. 4.4 Fixed Ratio
    5. 4.5 Percent Volatility Model
    6. 4.6 Levels for Changing the Number of Contracts
    7. 4.7 Conclusions
    8. References
  11. CHAPTER 5: Refining the Techniques
    1. 5.1 The Importance of the Trader's Temperament
    2. 5.2 Reduced f
    3. 5.3 Aggressive Ratio
    4. 5.4 Asymmetric Ratio
    5. 5.5 Timid Bold Equity
    6. 5.6 Equity Curve Trading
    7. 5.7 z‐Score
    8. 5.8 Conclusions
    9. References
  12. CHAPTER 6: The Monte Carlo Simulation
    1. 6.1 Using the Monte Carlo Simulation
    2. 6.2 Maximum Loss
    3. 6.3 Conclusions
  13. CHAPTER 7: The Work Plan
    1. 7.1 Using a Work Plan
    2. 7.2 Conclusions
  14. CHAPTER 8: Combining Forces
    1. 8.1 Using a Combination of Systems
    2. 8.2 Portfolio Money Management
    3. 8.3 Which Capital?
    4. 8.4 The Effects of Portfolio Money Management
    5. 8.5 Conclusions
    6. Reference
  15. CHAPTER 9: Money Management When Trading Stocks
    1. 9.1 Trading in the Stock Market
    2. 9.2 Conclusions
  16. CHAPTER 10: Portfolio Management
    1. 10.1 A Portfolio Approach
    2. 10.2 Some Improvements to the System
    3. 10.3 Conclusions
  17. CHAPTER 11: Discretionary Trading
    1. 11.1 Trading Criteria and Definition
    2. 11.2 An Example: Mediaset
    3. 11.3 Adjusting Volatility During the Trade
    4. 11.4 Trading Futures
    5. 11.5 Conclusions
  18. CHAPTER 12: Questions and Answers
  19. APPENDIX I
    1. I.1 The Impact of a Trading System on Planning
    2. I.2 The Trading System
  20. APPENDIX II
    1. II.1 Understanding the Type of Strategy
  21. APPENDIX III
    1. III.1 The Advantages of Forex
  22. APPENDIX IV: Online Trading
    1. IV.1 The Trader
    2. IV.2 Trading Profits
    3. IV.3 Systematic or Discretionary?
    4. IV.4 Choosing the Broker
    5. IV.5 Which Platform?
  23. Index
  24. End User License Agreement

Product information

  • Title: The Successful Trader's Guide to Money Management
  • Author(s): Andrea Unger
  • Release date: July 2021
  • Publisher(s): Wiley
  • ISBN: 9781119798804