Money Management Strategies for Futures Traders

This book was released in 1992 -- and is still as essential today to traders as it was 16 years ago. It seems like it is a secret gem of a book since there are only 2 Amazon.com reviews posted (both of which are five and four stars) in all these years.Maybe it's time for this classic to be re-discovered by a new generation of traders and investors. Surprising to me that the book "The Trading Game - Playing by the Numbers to Make Millions" sells so many books. The gimmick title "...Make Millions..." should make you wonder if it is authentic -- get Professor Balsara's book instead and learn the true principles of managing and understanding your risk.There is a reason Balsara's book is cited by 34 other books (most of which are written by the master traders of our time) and it is because this is the textbook that the master traders refer to in creating their money management strategies. This book has the formulas and the theory you need to manage your risk and avoid the risk-of-ruin.I found out about Balsara's book from Bennett McDowell, he recommends Balsara's book in his book "A Trader's Money Management System":A Trader's Money Management System: How to Ensure Profit and Avoid the Risk of Ruin (Wiley Trading)McDowell encourages his students to use Balsara's risk-of-ruin tables when designing their own personal money management system. It improves your bottom line when you calculate your current payoff ratio and win ratio and accurately determine the risk you should be taking on each trade by referring to the risk-of-ruin tables. Balsara also covers Optimal F in detail, which is another way to determine the amount to risk on any one trade based on your current payoff ratio and win ratio.Of course, another great author on this topic is Ralph Vince and his latest book is probably the most thorough account of using Optimal F effectivly:The Handbook of Portfolio Mathematics: Formulas for Optimal Allocation & Leverage (Wiley Trading)For some traders they should risk 2% of their trading capital on each trade. For other more experienced traders they can benefit by risking 10%. The key is to do the calculations and know where you stand at any given moment.Do yourself a favor, buy Balsara's book, Vince's book and/or McDowell's book instead of "The Trading Game".

If you really want a complex approach to $ Management and want to dig deep under the hood then this book is for you.As a futures trader for over 30 years, I can say that KISS makes more sense. If you trade multi-lots (which you should - 2 minimum) then all you need is to determine your expectancy for your various setups over a sample size and have a scaling regimen that gives you a high probability of laying your risk off.After that it is basically a normal distribution of data points to determine your overall expectancy over a large (30 -50 trade) sample size for your various setups.

The format of this kindle book is not great . Returned and will get a physical book.

I found the book to be a little dry but quite good. I have recommended it to several of my friends who trade options. I am not a futures trader my self but I found the ideas discussed to be very useful. You might want to read Fortunes Formula first which is a little shy on the math side and then this book.

The book provides in depth knowledge on many aspects of trading futures. I recommend taking a look.

recommend it for the insights into the market the math is probability not convinced but overall in the top 1% of 1% books i have read on the futures markets!

While a large percentage of individuals do not achieve financial success in the futures markets, traders who do succeed possess a solid understanding of risk and exercise a disciplined program of loss containment and money management. Nazer J. Balsara's Money Management Strategies For Futures Traders provides a wealth of materials for futures and stocks traders alike. The book is a must-read and a relatively easy-read for those who wish to enhance their risk management sophistication with complex tools and who believe that the best way to survive and prosper in the markets it to contain your losses, play defensively and let profits ride.All trading opportunities are not created equally and part of a trader's job is ferreting out the best markets to trade. The chapter on commodity selection presents four approaches to market selection, based largely on the work of J. Welles Wilder, the father of ADX (Average Directional Index Indicator) and RSI (Relative Strength Index). Here, the book is a good review of Wilder's ADX but focuses on the less-known aspect of his work: the commodity selection index. Wilder's approach uses ADX to identify futures yielding the greatest dollar-value price-moves for a given margin investment, in short, getting you in on the most appealing trades. Balsara also shows the utility of Wilder's price movement index when it is it is not possible to determine or estimate reward, thereby enhancing the analysis and return in mechanical trading systems. Sharpe ratios are also considered as a way of measuring risk-adjusted returns.The text gives useful approaches to managing risk through stop-loss orders by laying out the usage of time stops, dollar-value stops and volatility stops. There is also a presentation on how to survive locked-limit markets by creating synthetic options positions, spreads or offsetting positions in the cash markets.A studied read of this finance professor's work will help traders develop both the skill and the art of disciplined risk-taking.

I got the book on time. In good condition. The book might be little bit difficult for non finance reader.