Trading System Lab
Trading System Lab: Fixed-ratio money management
By Volker KnappThe fixed-ratio money management approach will be tested on two systems
— one countertrend (the SMA contra system) and one breakout (the ADX
consolidation breakout 1). The SMA contra system, featured in the January 2005 issue of
Active Trader, typically produces a high percentage of small profitable trades and a few large losses. The ADX Consolidation breakout 1 system (
Active Trader, May 2007) trades breakouts when directional movement is low.
The first system will be traded on a smaller account using conservative money management settings. The second system will be traded on a larger account using more aggressive money management.
For the complete article, see the June
2008 issue of Active Trader magazine. Click here to subscribe to the magazine.
Also, some articles become available for
download from the
Active Trader article store
a month after the issue is published.
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