I finally got around to reading about the blowup of Amaranth Advisors hedge fund. I’m astounded that some of these supposedly sophisticated hedge funds apparently have no clue about such basic concepts like money management, position sizing and ‘risk of ruin‘. The disaster at this fund is a great illustration of why I’ve […]

Here are my responses to the comments left on last week’s “position sizing considerations” post:
nonadamas wrote:
1. What about equipment, ISP failures, do you always write down your trades?
2. What kind of backup set-up do you have?
3. Brokerage problems, problems at their site or with their people making errors?
When I started active trading, […]

I want to share & expand upon the answer I gave to an email about position sizing the other day. Justin wrote:
[SNIP] After reading your article on 100 R i can now see that it would benefit me to daytrade and use 1 R per trade instead of my old 2 R per trade […]

This was the day of the sympathy plays for me as I caught some nice moves in GameStop Corp. (GME) and Infosys Technologies (INFY). Each of those stocks was up in sympathy with another stock that reported good earnings today / last night, Electronic Arts Inc. (ERTS) and Cognizant Technology Solutions Corp (CTSH), respectively. […]

The other day Marcos asked where he could find a position sizing spreadsheet. I just uploaded mine in case anybody else wanted a copy. It’s nothing fancy at all and it’s based on the percent risk position sizing model. Just enter your account equity and the amount you want to risk per […]

I’ve had several people ask me for more details about my trading process and the software that I use. Hopefully this post will answer those questions. Please leave any other questions n the comments section. I’m going to run through the hardware and software that I use as well as how I manage […]

I’m always amazed at how often I hear people say that they can’t afford “expensive” stocks. When they say “expensive” they really mean high-priced, as in price per share as opposed to truly expensive based on P/E ratio or some other valuation metric. So these same people would be all over the stock […]

(Edit: You may also be interested in my article detailing how I trade as well as my hardware and software setup.)
I’ve been exclusively day trading for almost three months now. The switch from swing trading has been quite an experience and I’ve had a few ‘light bulb’ moments along the way as you’ll […]

In ‘Scale Fish not Trades‘ Michael Taylor discusses why scaling into positions is not a good idea:

I have tested and retested scaling into trades in all my systems. And on every system I have created…scaling into a trade produced mixed results. Not one garnered better results than the original non-scaling method.

In response to Michael’s post, […]

I received an email from Richard yesterday which contained several very good questions related to my posts about those two trades I made yesterday. I thought others would like to see my answers so I’m going to answer the questions here:
Q: Regarding that ADTN trade, do you ever re-enter a stock after having […]