Automated Trading and Risk Management
June 9th, 2009
To make money in they markets, do you have to accurately predict which way the market is going to go?
Most people would answer yes, but in fact the answer is no. You do not need to consistently predict which way it goes to make money.
How is this possible? It’s possible because the factors that lead to financial success through trading are well known and largely ignored. These factors are:
- A system with written rules
- Risk management
- Proper position sizing
Since Automated Trading is done through rules, the first requirement is met. What about risk management?
is one of my favorite financial books of all time. It's an allegory about a guy who has a terrible job, and how he overcomes challenges to achieve his dreams.
