文档介绍：X PREFACE
you also goes to Dave Lowdon of Logical Systems Inc. for program-
ming support and to Mark Wiemeler and Ken McGahan for the charts
presented in the book. Thanks are also due to graduate assistants Daniel
Snyder and V. Anand for their untiring efforts. Special thanks are due
to John Oleson for introducing me to chart-based risk and reward esti-
mation techniques.
My debt to these individuals parallels the enormous debt I owe to Dean
Olga Engelhardt for encouraging me to write the book and Associate Contents
Dean Kathleen Carlson for providing valuable administrative support.
My chairperson, Professor C. T. Chen, deserves mendation
for creating an environment conducive to thinking and writing. I also
wish to thank the Northeastern Illinois University Foundation for its
generous support of my research endeavors.
Finally, I wish to thank Karl Weber, Associate Publisher, John Wiley
& Sons, for his infinite patience with and support of a first-time writer.
1 Understanding the Money Management Process 1
Steps in the Money Management Process, -1
Ranking of Available Opportunities, 2
Controlling Overall Exposure, 3
Allocating Risk Capital, 4
Assessing the Maximum Permissible Loss on
a Trade, 4
The Risk Equation, 5
Deciding the Number of Contracts to be Traded:
Balancing the Risk Equation, 6
Consequences of Trading an Unbalanced Risk
Equation, 6
Conclusion, 7
2 The Dynamics of Ruin 8
Inaction, 8
Incorrect Action, 9
Assessing the Magnitude of Loss, 11
The Risk of Ruin, 12
Simulating the Risk of Ruin, 16
Conclusion, 21
.
. . .
xii CONTENTS CONTENTS XIII
3 Estimating Risk and Reward 23 Wilder’modity Selection Index, 80
The Price Movement Index, 83
The Importance of Defining Risk, 23 The Adjusted Payoff Ratio Index, 84
The Importance of Estimating Reward, 24 Conclusion, 86
Estimating Risk and Reward monly
Observed Patterns, 24
Head-and-Shoulders Formation, 25 6 Managing Unrealized Profits and Loss