Category Archives: Risk Management

Pyramid Trading: Enhancing Returns without Increasing Risk

Posted on September 26, 2013 by

Last week I introduced a framework for adding to losing positions safely.  It is also possible to enhance returns without increasing risk by adding to your winning positions.  The approach is called pyramid trading (not to be confused with pyramid … Continue reading →

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Doubling Down: Enhancing Returns without Increasing Risk

Posted on September 19, 2013 by

Adding to losing positions is a sucker’s game and playing this game continues to bankrupt an ever-expanding group of traders and investment managers. As a rule, traders should never add to losing positions.  However, there are exceptions to every rule.  … Continue reading →

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Top 10 Trader Edge Articles

Posted on August 22, 2013 by

I started Trader Edge almost 18 months ago and it just occurred to me that I had never provided a list of the most popular articles on the site.  If you did not get a chance to read these articles … Continue reading →

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A Practitioner’s Guide to Diversification

Posted on August 15, 2013 by

Every finance student is taught the benefits of diversification.  Some learn the requisite formulas and a few even understand how to apply the formulas in practice.  Unfortunately, business schools leave out the most important lesson: the limits and costs of … Continue reading →

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Trend-Following Strategy Insights

Posted on June 27, 2013 by

Trend-following has been around for 40+ years and is one of the most widely-used strategies among commodity trading advisers (CTAs).  In my personal library, I have six different books dedicated to the subject. I have experimented with futures trend-following strategies … Continue reading →

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Warning – The Perils of Annuities

Posted on May 9, 2013 by

The concept is simple: write a single check to an insurance company and receive monthly income for the rest of your life, even if you live to be 100.  No more worries about market crashes, bursting bubbles, interest rate fluctuations, … Continue reading →

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11 Rules to Improve Your Trading: Rule #11

Posted on September 26, 2012 by

The purpose of this series of posts is to provide a manageable list of fundamental trading rules to help you improve your trading process – regardless of your experience level.  I will also explain the rationale behind each rule and … Continue reading →

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11 Rules to Improve Your Trading: Rules 9 & 10

Posted on September 21, 2012 by

The purpose of this series of posts is to provide a manageable list of fundamental trading rules to help you improve your trading process – regardless of your experience level.  I will also explain the rationale behind each rule and … Continue reading →

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