ARTICLE SYNOPSIS ...Money Management Using Simulation And Chaos by Bob Pelletier Here's how to determine your trading system's minimum capital requirements and discover how market exposure should be modified to maximize profits without increasing risk. Bob Pelletier explains. Any successful trading system must offer good timing signals, but timing alone does not guarantee profitable results. While good timing is essential, the addition of key money management techniques fashioned through mathematical manipulation can mean the difference between moderate success and the accumulation of true wealth. To succeed in...
ARTICLE SYNOPSIS ...Martingale money management by Robert Pelletier An age-old method used by professional gamblers may be useful to the active trader as a means of money management. A martingale, according to Webster's dictionary, is a scheme for doubling your bet size following losses. The system is named after a successful 19th century gambler who frequented the casinos of the French Riviera. In a converted form the idea can be transformed into a mild progression which requires a slightly increasing wager level following losing trades and an equal or decreasing unit wager following winning trades. To use the...
ARTICLE SYNOPSIS ...The optimization of a trading program by Robert C. Pelletier Many people have purchased software which gives the opportunity to test various parameter combinations to achieve the maximum profit results. For example, a system which may use three moving averages to determine market entry, market exit, and, perhaps, a stop parameter, might require the investigation of a range of moving average readings for each of the three moving averages. Investigating all the combinations of three moving averages for a system where each moving average can take on 10 possibilities would require the computer t...