MM/Risk Management Books

Hello,

I am looking for a beginnners MM/Risk Management book - can anyone recommend one?

I have had a look around on the forum and I cannot make heads or tails of a book that is recommended by the mass.

Thanks,
Vip

The best book I have read on these subjects is by Dr. Van K Tharp and is titled Trade Your Way to Financial Freedom. It is primarily aimed at stock and stock options but the principals apply to forex and can be adapted.

Van Tharp offers several different MM strategies in the book. He has a web site which has more of his books as well.

He discusses risk in terms of two things:
First is Expectancy- how much you can expect to win or lose on each trade based on historical data. The book explains how to calculate this for a trading system.
Second is Position Size- how much of your capital you are willing to risk on each trade.
Finding the balance between these two allows you trade with confidence, limiting draw down while maximizing realistic profits.

To apply this to Forex you might want to do searches on effective leverage- and lot size- and find articles on them to understand how to apply risk management in forex.

Excellent... thanks very much, I will take a look into this!

Have a google for forexhit it has some good info on it that helped me out.

cheers

Kiwi

Ralph Vince is the sole legend in the area of MM. He doesn't teach anything about trade management though.

My maths is not the greatest of all... but I am not seeing MM as the grail... but it surely is one thing that people miss out on. It's amazing... people are looking for perfect entries, do not concentrate on MM and adopting MM to different market conditions.

There are several things I need to get my head around... ME or PE is one thing on measuring a system.

Then adding position sizing/risk management into this as well.

Thanks guys, I will take a look into this.

I am currently reading " The Universal Principles of Successful Trading" by Brent Penfold. He covers *Fixed Risk*, *Fixed Capital*,*Fixed Ratio*, *Fixed Units*,*Williams Fixed Risk*,*Fixed Percentage* and *Fixed Volatility * money management methods and explains each as well as their attributes and down-falls . Its been a great book that I wish I'd read years ago when first starting to trade.


Best in life ,

EZ

Cheers guys!

Ralph Vince - he is the man!!!!

Excellent stuff on MM!