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The Only
Money Management
$trategy
That Work$
in Trading
BUT
Before We Start...
7 Lies
of Trading
Lie #1
Trading is Just Like
Investing
Trading is
Nothing
Like Investing
Investing
is just BTFD
The
Simplest
Way to Make Money
In The Market Is....
Put
60€ into VTWSX
40€ into BNDW
Every Week for Rest of
Your Life
EXCEPT...
Trading is About
Absolute
Return
Trading is Also
About Proper
Gambling
(More on this
Later)
Lie #2
Discipline is what
Matters
No One Could Follow
Such Rules Consistently
Total
Nonsense
The Only Way To Create
Discipline is to
Institutionalize
FAILURE
Into Your Trading
Lie #3
Trading Strategies
Are Key to Winning
There Are Only TWO
Strategies in Trading
Continuation
|Reversal
The Key To Winning Is
To Figure Out If the
Market Is
Lying
or Not
Good Poker Players Read
The Table
Good HF Managers
Read Market
Regime
All Winning in Trading:
Apply Right
Strategy to
Market
Regime
Lie #4
Indicators are Unique
All Indicators are
Variant of
Rate of
Change
Calculations in Price
All Indicators are
Similar
All Indicators Generate
Basically the
SAME
Signals
Lie #5
To Trade - All You Need
Is Technicals
Elliot Wave
Fibonacci
Gann
Haromics
= ASTROLOGY
Candlesticks
Patterns
Indicators are Useful
BUT...
They Don’t Create Price
They Only Report It
NEWS
Creates Price
Lie #6
Automated Trading Will
Make Me Money
Why You Can’t “AI” the Market
1.The Data Keeps Changing
2.Data More Noise Than Signal
3.Edge Comes from Nuance
4.Complexity Kills
Lie #7
You Can’t Win Unless
You Trade 2:1
Risk/Reward
The
Greatest
Lie EVER
Backtest Any Strategy
And You Will See That
2:1 Trades Occur
25% of the
Time
That’s Why Everybody
Loses
2:1 Trade is a
LOTTERY
TICKET
The Only Way to Capture
it Successfully is with
Short/Exit
Long/Exit
Setup
What is
R?
R = Stop
(i.e. 30 pips)
Strategy
Trade 2 Units
1.Short Exit->1st Unit @ 1R
2.Move Stop to Breakeven
3.Long Exit-> 2nd Unit @ 2R
EXAMPLE 1
52% Win on Exit 1
28% Win on Exit 2
+4R on Exit 1
+8R on Exit 2 (56-48)
+12R per 100 trades
EXAMPLE 2
48% Win on Exit 1
32% Win on Exit 2
-4R on Exit 1
+12R on Exit 2 (64-52)
+8R per 100 trades
NIRVANA
55% Win on Exit 1
35% Win on Exit 2
+10R on Exit 1
+25R on Exit 2 (70-45)
+35R per 100 trades
NOTE
in None of the
Examples do You Need a
Big % Edge to WIN
Takeaways 4
Real-Life
Trading
#1
Judge Results in
100 Trade
Batches
#2
Enter with Algos
Exit with
Discretion
(Adjust 4 Regime)
or #2
Use Algos to Signal
Use Discretion
to Enter and
Exit
#3
Machines Only Give
Signals
Regime Wins
Trades
#4
Trade 3 Pairs Only
Per Strategy
(Less is More FX Highly
Correlated)
#5
Diversification
in Trading Comes from
Strategies NOT
Instruments
#6
Trade ONE Times Equity
Per Trade
(i.e. 10,000 Units per
Trade for Every €10,000
in Account
1 Million Years of Evolution:
I Want To Eat NOW!
I Want to F NOW!
#7
Understand Why You Will
Never Be Patient
(Build That Human Flaw
In Your Trade Plan)
Have
FUN:)
In What Other Business
Do We Look Forward To
Mondays?

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The Only Money Management Strategy That Works in Trading