New posts

Reply to thread

Message

So then to quantify RISK is in every single case subjective so to over come the problem allocate RISK.

This then places a bottom on the RISK that we take on any one trade.
We have control of that risk.
Its called an INITIAL STOP

In itself this is not sufficient enough to Manage Risk

What we dont have control of is the number of times our stop will be taken out in any period.---So to equate the effectiveness of our setting of a stop and its effectiveness as a money management tool we need 3 more pieces of information.

(1) Over X period (The longer the better) what was the greatest string of consecutive losses?
(2) Average consecutive losing trade.
(3) Whats is our average win to our average loss.

Without these three important pieces of information setting of a stop could be simply like filling a bucket with a hole in it.

Take it away Duc--i --san

<blockquote data-quote="tech/a" data-source="post: 38100" data-attributes="member: 257">So then to quantify RISK is in every single case subjective so to over come the problem allocate RISK.This then places a bottom on the RISK that we take on any one trade.We have control of that risk.Its called an INITIAL STOPIn itself this is not sufficient enough to Manage RiskWhat we dont have control of is the number of times our stop will be taken out in any period.---So to equate the effectiveness of our setting of a stop and its effectiveness as a money management tool we need 3 more pieces of information.(1) Over X period (The longer the better) what was the greatest string of consecutive losses?(2) Average consecutive losing trade.(3) Whats is our average win to our average loss.Without these three important pieces of information setting of a stop could be simply like filling a bucket with a hole in it.Take it away Duc--i --san</blockquote>

[QUOTE="tech/a, post: 38100, member: 257"] So then to [B]quantify RISK [/B] is in every single case subjective so to over come the problem [B]allocate RISK.[/B] This then places a bottom on the RISK that we take on any one trade. We have control of that risk. [B]Its called an INITIAL STOP[/B] In itself this is not sufficient enough to [B]Manage Risk[/B] What we dont have control of is the number of times our stop will be taken out in any period.---So to equate the effectiveness of our setting of a stop and its effectiveness as a money management tool we need 3 more pieces of information. (1) Over X period (The longer the better) what was the greatest string of consecutive losses? (2) Average consecutive losing trade. (3) Whats is our average win to our average loss. Without these three important pieces of information setting of a stop could be simply like filling a bucket with a hole in it. Take it away Duc--i --san [/QUOTE]

Verification