Chapter 23. Money and Risk Management
Chapter Objectives
After reading this chapter, you should be familiar with
• Definitions and measurements of risk as it relates to money management
• The martingale betting strategy
• Diversifiable versus correlated risk
• Methods for testing money-management strategies
• The use of various types of stops to manage risk
• Methods for determining the minimum capital needed for a system
• Methods for determining the percentage of capital to allocate toward one system
Chapter Summary
Risk and Money Management
Money management is primarily concerned with how to measure and manage risk of loss and financial ruin. Risk is the amount and probability of a loss or series of losses occurring. The essence of money management ...
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