MANAGING YOUR MONEY AND POSITIONS
MANAGING YOUR MONEY AND POSITIONS Much of this book is designed to give you ideas about whether to day trade at all, what you want to trade, and how you want to trade it. That leaves one remaining issue: how much of your money to put on the line each time you trade. Risk too much, and you can be put out of business when you lose your capital. Risk too little, and you can be put of out business because you can’t make enough money to cover your costs and time. Over time, many academic theorists and experienced traders have developed different systems of money management designed to help traders, investors, and even gamblers manage their money in order to maximize return while protecting capital. In this chapter, I explain how some of the better-known systems work so that you can figure out how to best apply them to your own trading. Some of the material is related to leverage, which is borrowing money to trade. Leverage can dramatically increase the money t