Monday, April 27, 2020

TRADE YOUR WAY TO FINANCIAL FREEDOM (BY VAN THARP)

Here is the link.


  1. Trading that fits
  2. The notion of R - risk
  3. Exiting techniques
  4. Opportunity 
  5. Position sizing 


Not a "one" size fits all 
4 characters    

R The risk you predefine before entering a trade

Amazon 
Buy $1600
Stop: $1500
1R Your risk = $100

$400 = 4R profit 


Trading is not a marriage - match personality

3 exiting techniques:
  percentage exits - step out at a 7-8% loss - take the loss and move on
  time exits -
  volatility exits - might be just market noise -

percentage risk model - 1R = 10% of capital

Case study of three people


Stubborn steve - always 1R - $2,000 dollars
Risky Rachel - percentage risk model - 10% of total - increase/ decrease, increase if winning, decrease if losing
Conservative charlie - 2% rule - 2% of capital risk




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