| OCT 1992
Trading The Equity Curve by Joe Luisi
Trading The Equity Curve by Joe Luisi Technical analysis is typically applied to prices to determine the trend and changes in the trend. Now consider applying the same concept to analyzing your equity curve to determine those times when your equity may not be trending in the preferred direction. Money management may be the single most important aspect in trading, but few traders spend the necessary time required for successful trading. Generally, it is a rule of thumb that traders should spend 30% of their time analyzing the markets and 70% of their time split between looking for low-risk, high-profit trades and money management. With the increasing popularity and availability of the home computer, trading systems promising huge rewards have burst on the scene, but not necessarily delivering. The novice trader may be led to believe that with the right system, he or she can beat the market and achieve great monetary success. The truth is quite the opposite. SECRETS OF SUCCESS? To be successful, a trader only needs a system that is 51% accurate and sometimes not even that. Most successful money managers use systems that are only 40-50% accurate, but they have very strict money management standards and their risk to reward ratio is very high. A money management plan is very important, even if a trader does not use a mechanical system to trade, an accurate record of trades executed should always be kept and equity plotted on a daily basis. Such records can give the trader a visual idea of how his or her trading is faring—trending up, down or flat.
by Joe Luisi
Technical Analysis of STOCKS & COMMODITIES
The Traders’ Magazine since 1982
has had over 1,226,237 subscribers from 174 different countries.
37,000 Page Traders’ Archive for $89.99
To continue reading, sign-up for trial access to Traders.com and the S&C Archive — 37,000 pages of trading ideas!
After verifying your email address, you will have limited access to the S&C Archive, as well as access to a Digital Edition of S&C, and access to Traders.com Advantage and Working Money for 30 days.
Not a subscriber to Technical Analysis of
STOCKS & COMMODITIES magazine?
Click
here to subscribe, or request
a trial subscription.
Log-in now to view articles from the S&C Archive.
Your Subscriber ID is located at the top of your magazine label, highlighted here in red.
Your last name can be found on the second line, highlighted here in blue.
*If you have a company name on the label, that can also be used. It will appear below your name on the label.
If you do not have a Subscriber ID on your label, you can find it on your statement or renewal form.
For help locating your Subscriber ID number, please call us at 1-800-832-4642 or send an email to Survey@Traders.com. If sending an email, please include your name and mailing address.