Category:Money Management

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«The real secret of success in the world of investment and speculation is not good advice on what to buy, but to know what investments should be avoided».
(Morton Shulman)
MM.jpg

Money Management is not about "whether and where to put the stop loss" (even if the stop loss is still tied). It doesn’t either pertain following the open positions, or the technical exit with a profit using trailing stop or take profit.

The "syntagm" Money Management (which henceforth we will abbreviate with "MM") designates the "discipline" that studies the monetary amount for an ideal "bet". Basically, it indicates how much money one can risk in each individual trade.

We didn’t use the two words "discipline" and "bet" randomly. Discipline means both a "branch" of a subject and being disciplined. The term "bet" on the other hand scares as it evokes gambling, and the trader does not want to mingle with gamblers (and should not); it scares to the extent that the definition of "playing the market" irritates us all. Yet, in this case, the analogy with gambling fits because the MM roots sink into the gambling habit and the goal is exactly to limit the “hazard".

Notes:

Pages in category "Money Management"

The following 4 pages are in this category, out of 4 total.

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