04 Risk and Money Management
This course module covers the basics of risk and money management. The core concepts are to minimize the risk of ruin and maximize equity growth from the perspective of a short-term trader.
Among other things, we will use the expectancy value and the Kelly Criterion for risk control and capital growth optimization.
After successfully completing units 041 and 042, you should be able to:
- describe how changes in various input variable impact probability distributions,
- use trade- and time-based risk limits to avoid catastrophic loss of your trading account,
- perform simple Monte-Carlo simulations and interpret corresponding probability distributions,
- calculate the expectancy value and risk-over-reward ratio of a trading strategy,
- use the Kelly Criterion to define optimal position size and loss limits and
- select corresponding trading vehicles that match your risk profile.
|041 Risk Management Basics||00:14:00|
|042 Money Management Basics||00:17:00|