Tag Archives: position sizing

Stock Market Returns Are Almost Never Realized Returns

Unless one is fully invested in a single stock or ETF, portfolio returns depend on allocation. In the case of trading, returns depend in addition on risk parameters. Although this sounds trivial, some economists and bloggers do not seem to understand … Continue reading

Posted in Risk Management | Tagged , , | Leave a comment

Practical Position Sizing Based on the Risk Ratio

In the blogosphere and elsewhere one can find many articles about optimal position sizing and on maximizing equity growth via the use of fancy math, for example the Kelly ratio. Traders and investors should ignore such supposedly optimal methods of sizing positions … Continue reading

Posted in Risk Management | Tagged , , | Comments Off on Practical Position Sizing Based on the Risk Ratio

The Most Valuable Chart of All Time

This is what I could come up with today. Understanding this chart is half the battle.

Posted in Risk Management | Tagged | Comments Off on The Most Valuable Chart of All Time

Short-term DIvergences in S&P 500 and Russell 2000

This may be called “the year of the divergences”. Short-term divergences between key indicators and/or price are caused by volatility. For example, the 14-day Average True Range (ATR) of the S&P 500 Index was at 0.82% on March 21 but rose to 1.45% on June … Continue reading

Posted in Technical Analysis | Tagged , , , , , | Comments Off on Short-term DIvergences in S&P 500 and Russell 2000

Price Action Lab Alerts for Friday, May 18, 2012

This alert is about a signal in SPY for entry at today’s open and exit at the close and also about short signals in a Dow 30 stock.

Posted in Price Action Lab Alerts | Tagged , , , , | Comments Off on Price Action Lab Alerts for Friday, May 18, 2012