What’s the best book on money management, position sizing, risk control etc ? ta
What are you looking for specifically?
Strategies employed by others don’t always work for the individual. You need to identify your own appetite for risk which correlates with your longer-term goals, capital restraints, strategy and availability to actually trade.
The concept is actually quite simple.
Protect your principal @ all times by not over-leveraging yourself.
Read this.
Jake
In addition to what FOREX unlimited has already said You can do an internet search as well as utube. Overall you want a plan that protects your startup capital and grows it the same time. At different stages your focus can be a little more than the other. The same as your trading method should suit your personality, experiences, time you can spend trading and learning. Money management has to follow the same path as it funds your trading method.
Here’s a tool I used when I first started. I’m not vouching for anything they’re selling or offering, just the money management tool Forex Money Management
Good Luck
Gp
Not understanding risk and the different types of risk is probably the single most reason why aspiring traders fail. Most people think of risk in terms of how much money they’re going to potentially lose on a trade. And although that is important that is not a complete understanding of risk. So let me give you an example. There is volatility risk, drawdown, market risk, trade risk, portfolio risk, and account risk. To trade profitably you need to have a good understanding of each and every one of these. Every trade will have a complete risk profile, and before you enter a trade to better know exactly how to set your profit target and losses to fit within that risk profile. I highly recommend that you read Tim Lucarelli’s book “Forex secret- Successful scalping strategies from the dark side” to give you a basic understanding of how to create an trade within your risk profile. Whether or not you choose his trading strategy is not the point where discussing here. But I can tell you this after spending a week with Tim (Which by the way I don’t usually trade his strategy) What I learned from him about creating a risk profile combined with the strategy that I use. I went from being a losing trader to after a year of trading this methodology I profit over 90% of my trades. It’s very important that if you’re going to trade successfully you understand a complete risk profile. Once you have a good understanding this is not something that takes up a lot of time. Since I’m a scalper I minute out of my trades in seconds to minutes. But every trade is adjusted to fit my complete risk profile.
Although this is not what you asked but I strongly recommend a book by Dr Alexander Elder, ‘Trading For a Living.’ One of the best books I have read, highly recommended,
I remember Johnnykanoo recommending Trade Your Way To Finacial Freedom by Van K. Tharp in Pipcrawler’s thread. It’s still on my things-to-read list but hopefully it’s as good as he recommends.
While I have both trade your way to financial freedom and trading for a living on my bookshelf and enjoyed reading them both. I think is very little in the books for the aspiring trader. Tharp is a psychologist and not a traitor therefore he doesn’t really understand what it actually takes to trade in my opinion. Elder is a great book writer and storyteller after reading all of his books I haven’t found anything in them that’s really relevant to today’s trading. This is just my opinion.
Thanks for all the suggestions, think ill give Elder a read and see if it can answer my question.
Let me know what you think of the book corez777.