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Saturday, November 17, 2007

Money Management: Strategies

Of course, that isn't all there is to money management. What I posted over the last few days, are merely the principles, behind which a money management strategy is built. There are many money management strategies that are built on those principles.

Personally, I just switched from a basic system, to a combination of Fixed Ratio and Kelly's, and my trade management works with a 'sliding' risk tolerance, for adding to my position once I'm within a trade.

Types of money management strategies include Fixed Ratio, Fixed Contracts, Fixed Sum, % of Capital, Optimal f, Secure f, Kelly f and hybrids thereof. Some are considered more risky than others (Kellys). You can create your own. I urge all traders to look to money management principles to create a money management strategy that makes sense, that is sound, and leads to future growth.

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