Trading_for_Infinite_yield--_Utility_theory_and_you.pdf

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1、TradingforInfiniteYield:UtilityTheoryandYouItradeforinfiniteyield.Thisdoesn'tmeanthatIalwaysachieveit,butitismygoal.Iamnotalone.Otherprivatetradersdothesame.CTA'sandnormalmoneymanagersaredifferentinthattheytypicallytradetogetincentivefeesandinterestontheircustom

2、er'saccounts.Privatetraderstradeforalpha–directreturnfromdirectionalmovesandthevolatilityofthemarketstheyfollow.Theydon'tshootfor15%returnsperyear.Try40%–60%averageperyear.Thecostisdrawdownsinaccountsizeandtheemotionalcostsoftimespentnotmakingmoneytryingtogetbac

3、ktoanequityhigh.NotthatIexpecteverytradetomakeamilliondollars.Butasacomposite,mytradesinmanymarketssimultaneouslyarestructuredtomaximizereturnversustheriskItake.IhaveexperiencedseriousdrawdownsthatIdidnotenjoyonebit,butItradedthroughthemtogettonewequityhighshund

4、redsoftimes.Thereisadirectcorrelationbetweenriskandreward,sowhenyouhaveadefinable,provableedge,youcanapplymoneymanagementthatrewardsyouappropriatelyfordiligentlytakingyourtradeswiththecorrectpositionsize.Thereisaninterestingsecretthatmakesextremetradingpossiblea

5、ndhugelyrewardingifyouhavethefortitudetodoit,andthoroughlyunderstandtherisksinvolved.Laterinthearticle.IappreciatetheincredibleresponseIreceivedfollowingmyarticlehereinthepreviousissueofTrader'sWorld–DangerousSecretsthatGuaranteeAutomaticForexProfits.Apparentlyt

6、herearemanyreaderswhohavethedesireandwilltolearnhowtomanagetheirownmoneyforaboveaveragereturnsintheforexmarkets.Fortunately,conceptsthatworkinForexalsoapplytoallothertradablemarkets,especiallyfutures.Ihavebeenaskedcountlessquestionsfromnewtraders,“Whicharethebes

7、tmarketstotrade?”“WhattimeframesormethodsshouldItrade?”“WhattypeofmoneymanagementshouldIusetomakealivingatthis?”“Iamastrugglingtraderrightnow,withseeminglyendlessupsanddowns.Doyouhaveanyadviceorsuggestionsyouwouldgivetoanaspiringtrader?”Andmanymore,someveryspeci

8、fictosituationsthattheyhavecomeupagainstandneedtosolvebeforeproceedingintheirquest.Fortraders,asinmanyskilledoccupations,questionsleadyoutosuccess.Ifyoucanposeanintel