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Thursday, February 26, 2009

Money Management: Drawdown Kill Switch

"Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat." - Sun Tzu, The Art of War

To date in the money management series, we have explored the founding principles of money management. Risk Analysis, Reward Analysis, Trade Management, Drawdown, Accuracy Rates and Performance Analysis. We talked about Strategies and the need to find an edge to the market, or a bias, and to massage that bias. Those principles are the foundation.

There is much of those principles can be expanded upon, and there can be further discussion and explanations. These explanations will assist you to see more of the underlying strengths of the base principles. In this video, I discuss how Drawdown tolerance is affected by your Account Size, and the need to have a predetermined 'Drawdown "kill switch"'. I talk about that, in the following vlog entry which will be included in my "Money Management Playlist" ...

(Video Included. If you're seeing this entry elsewhere and cannot see the Video? Click this link to view the entry ...)

Don't forget, that the Blog TV Show is this Friday at 5:00 pm, Eastern Standard Time.

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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.

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