Trade management is where professional traders make their money. When designing trade management tools there is a right way and a wrong way. The wrong way is to create a list of trades and then apply the trade management rules to them. Most trading software puts the trades on first, and then applies the overlay or risk management strategies. Examples of software that integrate risk management with trade selection are Trading Blox, Mechanica and TradersStudio. The aim of this article was to explain some simple trade management concepts and show how they can be implemented. Remember the most successful managers in the business consistently put more emphasis on their money management systems than signal generation. Now, with new software that integrates the trade management function with trade signals, the average trader can see how these strategies help build an account and produce consistent returns.
Money management: Putting theories to work Murray A Ruggiero Jr Futures; Aug 2010; 39, 8; Docstoc pg. 46 Reproduced with permission
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