Chapter 15: Most people suck at money management
In this chapter, you will learn that:
• Money management is a key skill that separates professional traders from the unprofitable masses. The majority of traders underestimate the importance of this area. They suck at it and they deserve to have money stripped out of their accounts by the markets.
• Money management involves calculating how much money to assign to each position based on your risk assessment.
• There are several ways to establish how much money to devote to each position. The equal-portions model involves dividing your equity by the total number of positions you intend to hold. The market capitalisation model assigns capital on the basis of risk as determined by the market capitalisation ...
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