Van Tharp Money Management with R Multiples

http://www.vantharp.com
http://www.tharptradertest.com

Van Tharp talks about R Multiples which he wrote about in the book Trade Your Way To Financial Freedom. R Multiples is a way of defining risk. It is the amount of money you are WILLING TO LOSE if you are wrong on a trade. So his definition of risk is how much you'll lose per unit of your investment (i.e., share of stock or number of futures contracts) if you are wrong about the position that you have taken.

This is called the initial Risk or (R) for short.

One of the key principles for both trading and investing success is to always have an exit point when you enter a position. Trading without a pre-determined exit point is like driving across town and not stopping for red lights—you might get away with it a few times but sooner or later something nasty will happen.

Category:

Education

Tags:

• R multiples
• Money Management
• how
• to
• trade
• trading
• position
• sizing
• daytrade
• investing
• money
• finance
• business
• forex
• futures
• stockmarket
• van tharp
• trading psychology

[sallyreel]

yes. most people don't like to know these stuff becoz money management & risks management are often boring but you have to agree they are important. Most people prefer the trade setups ie. entry signals because it get them excited, just sex.

[infoanalysis]

Ed Seykota did not have nice things to say about this guy. This guy is not a trader he is a parasite