Develop the skills to manage risk in the high-stakes world of financial speculation.
The Risk of Trading is a practical resource that takes an in-depth look at one of the most challenging factors of trading--risk management. The book puts a magnifying glass on the issue of risk, something that every trader needs to understand in order to be successful.
Most traders look at risk in terms of a "stop-loss" that enables them to exit a losing trade quickly.
In The Risk of Trading, Michael Toma explains that risk is ever-present in every aspect of trading and advocates that traders adopt a more comprehensive view of risk that encompasses the strategic trading plan, account size, drawdowns, maximum possible losses, psychological capital, and crisis management.
Shows how to conduct a detailed statistical analysis of an individual's trading methodology through back-testing and real-time results so as to identify when the methodology may be breaking down in actual trading
Reveals why traders should think of themselves as project managers who are strategically managing risk
The book is based on the author's unique 'focus on the risk' approach to trading using data-driven risk statistical analytics
Using this book as a guide, traders can operate more as business managers and learn how to avoid market-busting losses while achieving consistently good results.
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Not what I was expecting
The book's title (The RISK of Trading) and summary led me to believe it was principally a book about risk, perhaps along the lines of Peter Bernstein's excellent Against the Gods. That's not what this book is about. The Risk of Trading is a practical, how-to guide to trading. It is directed towards new, small capital traders looking to improve their performance by placing a greater emphasis on risk monitoring and measurement. If that's who it was, I might have found it useful. As someone who works on the institutional side and was interested in learning more about how risk professionals see the world, I was disappointed.
Like another reviewer, I found the discussion of theoretical risk vs. practical risk interesting.
- Bline "bline24"
Big-firm ideas scalable to small traders
- Phil O.