Money, Risk, And Strategy Management Guide
Last Updated on December 20, 2022
Trading is very much a game of managing risk. This is probably the second most important component in trading after a positive statistical edge! Below we have listed all the articles and posts we have written about the subject:
Money, risk, and trade management in trading systems:
- Curve Fitting Trading – Why It Could Break Your Trading Career (What is it? – Backtest)
- What is Monte Carlo simulation in trading and investing? (Measure luck and uncertainty)
- Is optimization good in trading? (How to optimize a trading strategy)
- How Important Are The Best Days Compared To Total Profits?
- What are negatively skewed trading strategies? (Example of negatively skewed distribution – fat tail)
- How to enter and exit positions at the close in Amibroker and Tradestation (using daily bars)
- Simple vs complex trading strategies: The simpler the better
- 2 reasons why less is more in trading (why keep trading and investing simple)
- Why Experience Matters
- A Different Approach To Money Management
- Some random thoughts about risk
- Why consistency in trading is important
- Is Trading A Game of Skill Or Chance?
CAGR – arithmetic and geometric averages:
- CAGR – what is it and why is it relevant for investors and traders?
- Why arithmetic and geometric averages differ in trading and investing (Position sizing and the Kelly criterium)
- What Is Risk-Adjusted Return? (Examples And Formulas)
Stop loss and targets:
- Stop Loss Strategy – Pros And Cons (Stop Loss Options)
- Should You Use Profit Target In Your Trading Strategy? (What Is A Profit Target In Trading?)
- The value of using targets
- 5 Exit Strategies in Trading – When To Exit A Trade?
Drawdowns in trading:
- Why is max drawdown important in trading? What is a good drawdown percentage?
- How to deal with drawdowns (How to prepare and minimize drawdowns)
- 180 Years of Stock Market Drawdowns
- How Much Pain Can You Take? Risk, Hindsight, Consistency, And Paper Trading
Trading strategy and system performance:
- Win ratio in trading – what it is and why it is important (winning ratio)
- Trading strategy and system performance metrics (What is it and how to use it)
What Is A Good Equity Curve? – Profit & Loss Curves Best Practices
- The Sharpe Ratio Explained (What is a good Sharpe Ratio? Examples)
- The profit factor explained (what is a good profit factor in trading? Examples of profit factors)
- What is K-Ratio?
- Treynor Ratio, how to calculate it: What is it and what is good?
- Jensen Ratio – what is it and how is it calculated? (Jensen’s Performance Index)
- Sortino Ratio – what is it and how do you use it?
- Ulcer Index — What Is It?
Correlation, non-correlation, and portfolio management:
- What does correlation mean in trading? (Trading strategies and correlations)
- Uncorrelated assets and strategies – benefits and advantages (examples and backtests)
- Does your trading strategy complement your portfolio of strategies?
- Why build a portfolio of quantified strategies (including two strategies)