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Product Description
Product Description
Every futures, options, and stock markets trader operates under a set of highly suspect rules and assumptions. Are you risking your career on yours? Exceptionally clear and easy to use, The Mathematics of Money Management substitutes precise mathematical modeling for the subjective decision–making processes many traders and serious investors depend on. Step–by–step, it unveils powerful strategies for creating and using key money management formulas––based on the rules of probability and modern portfolio theory––that maximizes the potential gains for the level of risk you are assuming. With them, you′ll determine the payoffs and consequences of any potential trading decision and obtain the highest potential growth for your specified level of risk. You′ll quickly decide: What markets to trade in and at what quantities When to add or subtract funds from an account How to reinvest trading profits for maximum yield The Mathematics of Money Management provides the missing element in modern portfolio theory that weds optimal f to the optimal portfolio.
From the Inside Flap
Until now, money management practices have been driven by a loose collection of highly subjective rules of thumb. By failing to accurately understand the outcomes of their potential actions, many traders and serious investors have been operating blind. The Mathematics of Money Management injects a new degree of precision into your trading strategies. Based on the rules of probability and modern portfolio theory, it shows you how to create and use these money management techniques in the futures, options, and stock markets. And you don’t need to be a PhD to exploit these strategies. Every equation and formula is easy to understand, and practical examples are provided for immediate hands–on use of the trading techniques discussed. By wedding the precepts and practices of modern portfolio theory to the concept of optimal f, The Mathematics of Money Management shows how to gauge the payoffs and consequences of every potential trading action, before you take it. Armed with this information, you’ll obtain the greatest potential investment growth for your specified level of risk, no matter what your chosen market. You’ll use these time–tested strategies to:
- Evaluate the risks and rewards of any potential trading decision
- Accurately weigh and assign values to the components of any portfolio
- Determine exactly how many contracts to trade for a specific market and/or system
- Maximize profits under reinvestment trading
- Prognosticate future system performance
Inside This Book
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First Sentence
Whenever you enter a trade, you have made two decisions: Not only have you decided whether to enter long or short, you have also decided upon the quantity to trade in. Read the first page
Front Cover | Copyright | Table of Contents | Excerpt | Index | Back Cover
Whenever you enter a trade, you have made two decisions: Not only have you decided whether to enter long or short, you have also decided upon the quantity to trade in. Read the first page
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Front Cover | Copyright | Table of Contents | Excerpt | Index | Back Cover
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Customer Reviews
Most Helpful Customer Reviews
6 of 6 people found the following review helpful
Format:Hardcover
I would have given this book 5 stars if it was written with more examples to demonstrate the theories and formulas that it contains. The author certainly doesn't "spoon feed" his material to the reader. If you are innumerate stay away from this book. Of course, if you are innumerate stay out of trading the markets. What the author has to say regarding the correct amount of contracts or shares to buy based upon the calculation of optimal f is very important in order to keep from going broke and to receive expotential gains. It is loaded with concepts to facilitate the money mangament element of trading. I would say that a good prerequisite for reading this book would be an engineering degree something like advanced rocket science.
6 of 6 people found the following review helpful
Format:Hardcover
Vince's work is the very best available for the topic of money management in futures trading. If you have ever wondered how many futures contracts you should buy to optimize account growth, what the maximum downside risk is and how to control damage then this book is a must for your trading library. The book is mathematically oriented but if you invest the time to really understand it your ability as a money manager will greatly increase. A must for any serious trader!
Format:Hardcover
The title says it all.
If this is the sort of book you want to avoid your not going to get very far with your trading Im afraid.
Do what others wont, read it.. stick with it and dont be put off by the maths... its actually straightforward to understand although I doubt Im going to remember many of those mathematical formulae, so long as you understand why they were used in making the calculation to arrive at the inference provided youll be fine, and the lessons will blow you away with echos of other parts of your trading. This to me is THE definitive guide to money and position management and its consequences wonderfully explained using probabilities and gaming /gambling / trade sequence testing runs as backdrop with mathematical reasoning to assist in explaining WHY AND HOW he arrives at the amazing inferences and insights into the fine balance between winning and losing at this game. One of my top 10 trading books. If I had only 3 books to Fast track someone into the world of Trading, knowing what I know now, this would be book number three (10% importance), the first would be about Trading Psychology (70% importance), and the second would be about writing business and TRADING plan 10% importance). The 10% left is for everything else but the uninitiated waste their time on the 10% and brush over 90% mentioned...
If this is the sort of book you want to avoid your not going to get very far with your trading Im afraid.
Do what others wont, read it.. stick with it and dont be put off by the maths... its actually straightforward to understand although I doubt Im going to remember many of those mathematical formulae, so long as you understand why they were used in making the calculation to arrive at the inference provided youll be fine, and the lessons will blow you away with echos of other parts of your trading. This to me is THE definitive guide to money and position management and its consequences wonderfully explained using probabilities and gaming /gambling / trade sequence testing runs as backdrop with mathematical reasoning to assist in explaining WHY AND HOW he arrives at the amazing inferences and insights into the fine balance between winning and losing at this game. One of my top 10 trading books. If I had only 3 books to Fast track someone into the world of Trading, knowing what I know now, this would be book number three (10% importance), the first would be about Trading Psychology (70% importance), and the second would be about writing business and TRADING plan 10% importance). The 10% left is for everything else but the uninitiated waste their time on the 10% and brush over 90% mentioned...
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Most Recent Customer Reviews
heavey reading
this book it very heavy reading and not for people who cant get there heads round the maths, there is a wealth of information and different angles to money management... Read more
Published 2 months ago by lewis
A must for a system trader
The book delivers a good and detailed description of the money management, portfolio issues and much more. Recommended !
Published on 29 Jun 1998
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