From the Publisher
Permits traders in the futures, options and stock markets to create profitable trading formulas based on the rules of probability and modern portfolio theory. Shows how to develop and utilize key formulas which minimize losses, maximize profits and avoid excessive risk. Reintroduces the idea of ``optimal-f'' and its use in weighing and assigning values to the components of a trader's portfolio. Includes a computer program for immediate hands-on usage of techniques described.
From the Inside Flap
Until now, money management practices have been driven by a loosecollection of highly subjective rules of thumb. By failing toaccurately understand the outcomes of their potential actions, manytraders and serious investors have been operating blind. TheMathematics of Money Management injects a new degree of precisioninto your trading strategies. Based on the rules of probability andmodern portfolio theory, it shows you how to create and use thesemoney management techniques in the futures, options, and stockmarkets. And you dont need to be a PhD to exploit thesestrategies. Every equation and formula is easy to understand, andpractical examples are provided for immediate hands-on use of thetrading techniques discussed. By wedding the precepts and practicesof modern portfolio theory to the concept of optimal f, TheMathematics of Money Management shows how to gauge the payoffs andconsequences of every potential trading action, before you take it.Armed with this information, youll obtain the greatestpotential investment growth for your specified level of risk, nomatter what your chosen market. Youll use these time-testedstrategies to:
- Evaluate the risks and rewards of any potential tradingdecision
- Accurately weigh and assign values to the components of anyportfolio
- Determine exactly how many contracts to trade for a specificmarket and/or system
- Maximize profits under reinvestment trading
- Prognosticate future system performance
Now you can bid good-bye to unreliable money management assumptionsand faulty decision making. Heres the money management toolfor making mathematically correct trading decisions.