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Way of the Turtle by Curtis M. Faith

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eight RISK AND MONEY MANAGEMENT

Ruin is the risk you should be concerned with the most.It can come like a thief in the night and steal everythingif you aren't watching carefully.

Like many of the concepts we use in trading, expectation, edge, risk of ruin and so on, the term money management comes from gambling theory. Money management is the art of keeping your risk of ruin at an acceptable level while maximizing your profit potential by choosing an appropriate number of shares or contracts to trade, something we refer to as the size of the trade, and by limiting the aggregate size of the position to control exposure to price shocks. Good money management helps ensure that you will continue to be able to trade through the inevitable bad periods ...

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