文档介绍：forex. Free Forex Ebooks
Money Management (Pt. I):Controlling Risk and Capturing
Profits
By Dave Landry
Money management is the process of analyzing trades for risk and potential
profits, determining how much risk, if any, is acceptable and managing a trade
position (if taken) to control risk and maximize profitability.
Many traders pay lip service to money management while spending the bulk of
their time and energy trying to find the perfect (read: imaginary) trading system or
entry method. But traders ignore money management at their own peril.
The story of three not-so-wise men
I know of one gentleman who invested about $5,000 on options on a hot stock.
Each time the stock rose and the options neared expiration, he would pyramid
his position, plowing his profits back into more options. His stake continued to
grow so large that he quit his day job.
As he approached the million-dollar mark, I asked him, "Why don't you diversify
to protect some of that capital?" He answered that he was going to keep
pyramiding his money into the same stock options until he reached three to four
million dollars, at which point he would retire and buy a sailboat.
I recently met a second gentleman at a dinner party. He told me that six months
ago he began day trading hot stocks. It was so profitable, he said, that he quit a
flourishing law practice to trade full time. Amazed at his ess, I asked him,
"How much do you risk per trade, a half point, one point?" He replied, "Oh no, I
don't like to take a loss."
A third gentleman was making his fortune buying the hottest stock(s) on the
momentum list(s). He, too, was on the verge of quitting a essful business.
When asked about his exit strategy, he replied "I just wait for them to go up."
When asked, "What if they go down?" his reply was, "Oh, they e
back."
What ever happened to these "traders?" Gentleman number one is now
homeless, and the other two are