Synopses & Reviews
Risk control tends to be the last thing that most traders focus on, perhaps because of the popular belief that it's their trading strategy that will generate great fortunes. But ultimately, a strategy alone won't create riches. A trader or investor needs to develop discipline, a strong financial psychology, and a sound money management system to maximize profits and keep them out of financial danger. In
A Trader's Money Management System, veteran trader Bennett McDowell offers readers an expert guide to the most important elements of money management in trading.
McDowell shares his personal money management system, with the ultimate goal of helping you design your own system, customized to fit your risk tolerance, your experience level, and financial needs. He identifies the six types of risk to consider every time you make a trade—trade risk, market risk, margin risk, liquidity risk, overnight risk, and volatility risk—covering each in detail.
In easy-to-understand terms, the author then breaks down his system into five key elements. He first explains the psychology of risk control, telling what issues to look for and how to address them in order to more effectively implement your money management system. McDowell then details a variety of stop-loss approaches and gives you tips on how to make sure you adhere to them when they're hit. He follows with a discussion of trade size, showing how to determine how large or small your trade size should be so that you are not overextending your risk. McDowell then covers the crucial element of record keeping, and explains how it pays significant dividends. Finally, he shows how to design a realistic personal plan—one that you will continue to use and profit from.
This book also equips readers with two valuable tools: A one-month free trial of Trade Size Calculator software and The Trader's Assistant recordkeeping materials. The trial Trade Size Calculator software is downloadable at www.traderscoach.com (see Appendix A for details), and The Trader's Assistant recordkeeping materials can be photocopied directly from the book. These two tools complement the text and together provide a complete package that will deliver better results to your bottom line.
Synopsis
Money management in trading involves specialized techniques combined with the trader's own judgment. Not adhering to a sound money management program can find a trader exposed to a deadly risk of ruin, and, worst of all, most probably equity bust. A few essential money management techniques can make a big difference to the bottom line. In
The Trader's Money Management System, author Bennett McDowell will introduce readers to the most important elements of money management in trading.
Topics covered in the book include: psychology of risk control; how to design a money management program to get maximum profit from your trading system; tips on designing a stop loss strategy to keep you out of trouble while avoiding "whip saw madness"; how to calculate the best trade size on every trade; how to analyze your profit / loss results and identify weaknesses in your current strategy; plus much more.
Synopsis
Proven money management techniques that can help today's trader excel
Not adhering to a sound money management program can expose a trader to unnecessary risk, and possibly destroy their account. A few essential money management techniques can make a big difference to the bottom line. In A Trader's Money Management System, author Bennett McDowell introduces readers to the most important elements of money management in trading. Topics covered throughout this book include how to design a program to get maximum profit from a trading system; how to calculate the best trade size on every trade; how to analyze profit/loss results and identify weaknesses in a strategy; plus much more. Along the way, McDowell also addresses the importance of risk control and stop loss exits. The book also includes a one-month free trial of the Trade Size Calculator software.
Bennett A. McDowell (San Diego, CA) founded TradersCoach.com(r) in 1998 and is an expert in technical analysis and complex trading platforms. He lectures nationally and writes articles for many prominent trading publications. McDowell is also a recognized leader in trading education and is the author of The ART(r) of Trading: Combining the Science of Technical Analysis with the Art of Reality-Based Trading, to be published by Wiley in 2008.
Synopsis
Praise for A Trader's Money Management System"I am pleased to strongly recommend this excellent book, A Trader's Money Management System. If you are picking up this book, congratulations, since you have taken the first steps in following in the footsteps (by using proper money management) of successful traders."
—Steve Nison, President, Candlecharts.com, and author of Japanese Candlestick Charting Techniques
"Bennett McDowell demystifies money management for traders in his new book. With these simple, time-tested strategies, a trader will decrease the time it will take to become profitable."
—Adrienne Toghraie, President, TradingOnTarget.com
"Bennett McDowell does traders a HUGE favor in this valuable book by emphasizing the extreme importance of risk control and its vital place in a sound trading plan. Further, he provides knowledge of and access to specific tools, which enable the trader to implement his ideas simply and effectively. His simple straightforward treatment of a complex and often boring subject is a breath of fresh air and a worthwhilecontribution to this important element so crucial to the achievement of successful trading results."
—Edward D. Dobson, President, Traders Press Inc.
The best-kept secret to trading success: money management
Money management may very well be the most important piece of the trading puzzle. In A Trader's Money Management System, expert Bennett McDowell provides time-tested techniques that can turn a losing trader into a winning one—and take the winning trader to an entirely new level. In revealing his personal approach to staying out of trouble in the financial markets and maximizing profits, he offers comprehensive insights into:
The psychology of risk control as well as the finer aspects of setting stop-loss exits
The value of managing trade size and consistent record keeping
The process of putting together your own personal money management system
Unlike other books that focus on the complex mathematical theories behind money management, this book presents its system in straightforward, easy-to-understand terms that will allow you to quickly see how these concepts work—and immediately benefit from the value of effectively managing risk.
Synopsis
Money management may very well be the most important piece of the trading puzzle. In
A Trader's Money Management System, expert Bennett McDowell provides time-tested techniques that can turn a losing trader into a winning one?and take the winning trader to an entirely new level. In revealing his personal approach to staying out of trouble in the financial markets and maximizing profits, he offers comprehensive insights into:
- The psychology of risk control as well as the finer aspects of setting stop-loss exits
- The value of managing trade size and consistent record keeping
- The process of putting together your own personal money management system
Unlike other books that focus on the complex mathematical theories behind money management, this book presents its system in straightforward, easy-to-understand terms that will allow you to quickly see how these concepts work and immediately benefit from the value of effectively managing risk.
About the Author
Bennett A. McDowell,founder of TradersCoach.comR , began his financial career on Wall Street in 1984
,and later became a “Registered Securities Broker” and “Financial Advisor” for Prudential Securities and Morgan Stanley.
As a financial advisor, Bennett’s niche was “Active Trading” and “Investing” for a community of high net worth clients using his own proprietary trading system. This system later became known as the Applied Reality TradingR ,or the ARTR , system.
Bennett brought the ARTsoftware to the public in the year 2003. This was in answer to his clients’ many requests for him to share with them his successful trading and investing techniques. Today the ARTsystem is used in over 40 countries around the world by sophisticated hedge fund managers, individual investors and active traders alike.
Considered an expert in technical analysis and complex trading platforms, Bennett lectures nationally and writes articles for many leading trading publications including Technical Analysis of Stocks & Commoditiesmagazine. Internationally recognized as a leader in trading education, Bennett teaches trading to students worldwide through his company TradersCoach.com.
He is honored to be included as a member of the eSignal“Trading With The Masters” team. In addition, TradersCoach.com, Applied Reality Trading,and The Traders AssistantR Record Keeping System have received numerous Stocks & Commoditiesmagazine Readers’ Choice Awards.
Table of Contents
Foreword.
Preface.
Acknowledgments.
Disclaimer.
Introduction. This Is My Money Management System.
Part One. Psychology of Risk Control.
Chapter 1. It Just Ain't Sexy!
Chapter 2. Confidence In Your Plan.
Chapter 3. Yin & Yang.
Chapter 4. Risk Psychology and The Trader's Mindset.
Part Two. Stop-Loss Exits.
Chapter 5. Not Every Trade Will Be A Winner.
Chapter 6. Entry Rules and Your Trading System.
Chapter 7. Stop-Loss Exit Rules.
Chapter 8. Scaling Out and Scaling In.
Part Three. Trade Size Does Matter.
Chapter 9. Using Risk-of-Ruin Tables and the Optimal f Formula.
Chapter 10. Using the Two Percent Risk Formula and Proper Trade Size Formula.
Part Four. Record Keeping And Profit/Loss Analysis.
Chapter 11. Tracking Profit and Loss Results and More Formulas for Success.
Chapter 12. Using Trade Posting Cards and Ledgers.
Part Five. Design Your Own Plan.
Chapter 13. Know Thyself—Your Risk Profile and Discipline Profile.
Chapter 14. Risk Management Rules to Choose From.
Epilogue.
Appendix A. Getting Started with Your Trade Size Calculator Software.
Appendix B. The Trader's Assistant Record Keeping System.
Appendix C. The Art Of Paper Trading.
Appendix D. Resources.
Glossary.
About the Author.
Index.