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intro JWBK182-McDowell April 25, 2008 16:39 Printer: Yet to come

INTRODUCTION

This Is My Money

Management

System

T

his book,a Trader’s Money Management Systemis my personal ap-

proach to staying out of trouble in the financial markets and maximiz-

ing my profits. It’s a comprehensive strategy that will take you from

the psychology of risk control to the finer aspects of setting stop-loss ex-

its and the value of managing trade size, to record keeping. Finally, it is

a step-by-step guide on how to put together a personal system that works

for you.

Although many books on money management can be heavily focused

on themathematical formulasandmathematical theoriesof risk manage-

ment, I’m going to try to keep it simple and make the concepts as easy to

understand as possible. That way you can see the dramatic benefit of these

concepts quickly.

The Resources appendix at the back of this book has a list of terrific

(and not so simple) books that I recommend on the mathematical formulas

if you decide you want to delve deeper. They are the basis of many of the

techniques discussed here.

THE MAIN GOAL IS TO START NOW!

My goal is to get you started sooner rather than later with a system that is

workable, so that you can immediately benefit from the value of managing

your risk. If you don’t have any system in place right now, then this is the

perfect time to get it right. And, if there are a few areas in your current

system that need attention to get you to the next level, let’s work on that.

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