Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

ariel

Position Sizing

Recommended Posts

Hello, I've been reading about the art of position sizing and many people say that is the only "holy grail" of trading.

 

I recently found the articles writed by the Dr. Van Tharp.

 

Does anyone read his books? Are they as good as I heard?

 

I specially interested in his book "The definitive guide to position sizing", I tried to download but I couldn't do it. If someone has the book in pdf, please let me know where you found it

 

Thanks.

Share this post


Link to post
Share on other sites
Hello, I've been reading about the art of position sizing and many people say that is the only "holy grail" of trading.

 

I recently found the articles writed by the Dr. Van Tharp.

 

Does anyone read his books? Are they as good as I heard?

 

I specially interested in his book "The definitive guide to position sizing", I tried to download but I couldn't do it. If someone has the book in pdf, please let me know where you found it

 

Thanks.

 

ariel,

 

How about just buying? If it's really the "holy grail" you may regret, to be miserly about the $150...

 

Regards,

idetsc

Share this post


Link to post
Share on other sites

Hi Ariel,

 

His books are even better than you heard.

I bought the book "The definitive guide to position sizing" directly from IITM, as soon as it was released.

If you're really interested in position sizing (and you should!), this is a MUST-READ book.

It's definitely worth the money!

 

Also his other books give refreshing insights.

 

Regards,

bmistiaen.

Share this post


Link to post
Share on other sites

Greetings --

 

I have Dr Tharp's books, including "Definitive Guide to Position Sizing." I also have Ralph Vince's books. There are five of his, the most recent being "The Leverage Space Trading Model." All of these are worth reading. I have exchanged friendly and constructive correspondence with both gentlemen.

 

Both Tharp and Vince begin with the assumption that the system being traded is healthy and always remains healthy. They also both work with single backtest runs or distributions, and with single mean and standard deviations. From those initial conditions, they develop position sizing procedures.

 

I have written a book, "Modeling Trading System Performance," that extends the work of Tharp and Vince. It includes discussion of methods for determining whether a trading system is healthy or is broken, which I believe is extremely important -- perhaps most important. If a system is broken and trading continues, a loss of money will result. My book discusses specific statistical tests that can be applied to help answer that question. The confidence you have in the result depends very much on the distribution of the trades, or of the periodic changes in equity. There is a discussion of the characteristics of trading systems that lend themselves to making these tests most valuable.

 

I discuss distribution of trading results, which can be actual trades, out-of-sample test results, in-sample test results, or any distribution you want to analyze. Based on the distribution, analyze the probability of drawdown. Compare the drawdown that can be expected with your personal tolerance for risk to determine position size. Rerun the simulations with the position sizing method and parameters you have selected. Compute the distribution of annual rate of return and of drawdown and decide whether to trade the system.

 

Everything is completely explained, so you can replicate everything in the book. It is platform independent, so you can use results from any source. Microsoft Excel is used to run the simulations, and a well documented add-in is included.

 

Both Dr. Tharp and Mr. Vince have copies of my book. Mr. Vince is particularly complimentary.

 

You can learn more about the book at its website:

www dot modelingtradingsystemperformance dot com

 

Thanks for listening,

Howard

Share this post


Link to post
Share on other sites

Hi, idetsc, well I'm not saying this book is the holy grial I heard great things about Dr. Van Tharp's books. Buy it it's the logical answer but I should explain a little bit my situation. I from Bolivia and these kind of books are extremely hard to find, the forex or trading topics are practically inexistent so find a such advance book is really an imposible task.

 

I just came back from a long trip, I was almost a year out of my country and due to some new legislation in my country I have to get a new ID card and, of course, get another credit card to purchase these books. So I calculated that all these formalities will take me about 4 weeks ......we have a extremely bureaucratic system.......That's why I was looking for these books on internet.

 

Well I hope somebody already read the Dr. Van Tharp's books and can tell me about some sources about position sizing specially related to Dr. Van Tharp's investigation.

 

Thank you for the reply.

Share this post


Link to post
Share on other sites

I agree with the analogy to the holy grail. The discipline of rule based position sizing is an excellent way to stay in the game, even in the face of a maximum loss. Paired with a good exit or adjustment strategy to limit a loss, trading is more like a business.

 

As I recall there is a game which let's one see the effect of position sizing. If you are handy with Excel, you can optimize on the most profitable position size which is usually more than the conventional 2% rule of thumb limit.

 

There a several pdf's available at his website.

Share this post


Link to post
Share on other sites
Hello, I've been reading about the art of position sizing and many people say that is the only "holy grail" of trading.

 

I recently found the articles writed by the Dr. Van Tharp.

 

Does anyone read his books? Are they as good as I heard?

 

I specially interested in his book "The definitive guide to position sizing", I tried to download but I couldn't do it. If someone has the book in pdf, please let me know where you found it

 

Thanks.

 

You don't need to buy any books to read about position sizing. There is around a lot of free material that is even better and more practica, without the hype. Some examples:

 

Position Sizing

 

http://www.priceactionlab.com/Literature/PositionSizing.pdf

 

http://www.priceactionlab.com/Literature/Kelly.pdf

Share this post


Link to post
Share on other sites
You don't need to buy any books to read about position sizing. There is around a lot of free material that is even better and more practica, without the hype. Some examples:

 

Position Sizing

 

The Most Advanced Tool for Analyzing Price Action and Discovering Trading Systems

 

http://www.priceactionlab.com/Literature/Kelly.pdf

 

 

Yeah those resources embrace almost all important aspects of position sizing but lacks real examples. But nevertheless you can use your demo account to check the information for consistency, so to say ;). Position sizing is extremely important for Xau/Usd pair, as well as for other comdoll pairs...

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • ...hallucinates.... Student: “What if we gave the monkey LSD?” Guru: “The monkey already did LSD”
    • Question: To those that had/have cancer, what were the signs that made you think “something is not right here” to make you go see a doctor? Answer: So, 5/25/2018, I woke up, got ready for work, and as I walked to my car, I started gagging. Like something was stuck in my throat and I needed to clear it. And then it went away.   But 10 minutes after that, I was T-boned at 40mph on the driver side door. But what made me see a doctor was while my muscles felt better and bruises were going away, the gagging still continued, I started having fevers, my neck felt swollen, I was having such a hard time breathing, and I'd have random sharp pains in my chest, but not from where the seat belt saved me.   2 weeks after the accident, I finally see an urgent care doctor, who looks me over, tells me I'm fine, but luckily requests a neck X-ray. And I ask for a chest X-ray, which he rolls his eyes but let me have (most of my pain was in the neck, so I understand).   The very next day, he calls and says “So, that chest X-ray shows there's a 4 inch mass on your heart and lungs, and your lungs have been filling up with fluid, as well as in your pericardial (heart) wall. We need you to come in tomorrow.”   Turns out the big mass, due to the accident, caused my heart and lungs to tear and fill with fluid, the swollen neck and gagging was caused by 2 metastasized tumors, and the fevers and weight loss were symptoms. Stage 4b Hodgkin's Lymphoma.   But thankfully, we went very aggressive with chemo (and had a lot of bad side effects that don't normally happen to patients), and now I'm about 16 months cancer-free. Yay lucky X-rays! Rachel Jurina, Quora Source: https://www.quora.com/To-those-that-had-have-cancer-what-were-the-signs-that-made-you-think-something-is-not-right-here-to-make-you-go-see-a-doctor   Profits from free accurate cryptos signals: https://www.predictmag.com/  
    • As a man, the reality of life is the harshest part. I don’t mind looking older or becoming weaker over time; it’s nature.   Have you ever heard that the only people who will be loved unconditionally are women and children? Men will only be loved as long as they can provide until they are no longer needed. It doesn’t matter if you already did your best to get your kids to the best school or get the best things for them, if you stop before they’re done with it, there will be no thank you. The only thing they will remember is that they have to quit school at 15, ignoring all the previous 15 years of life you provided for them. The only people who will accept you, no matter what, are your parents. But in this situation, you might be that ungrateful child.   EDIT: Wow, I didn’t think this would get so much attention.   For those who disagree, I can only say that everyone has their problem. If you don’t get the chance to face such a thing, be grateful. Remember, sometimes what you throw in the garbage is something that someone wishes ever to have.” – ElZee, Quora   Profits from free accurate cryptos signals: https://www.predictmag.com/    
    • The good thing i had noticed so far is that the traderpot value is also on the rise..
    • yup its a gradual rollout the right way in my opinion, its really good and its exciting for the sto in 2027
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.