"Most 'money management' advice is folklore dressed in suspenders and a cheap cigar. It is not mathematical; it is superstitious."
The most significant contribution of this book is the introduction of . Drawing on the foundations of the Kelly Criterion—a formula used by gamblers and investors to maximize long-term wealth—Vince adapted these concepts specifically for the complexities of the futures, options, and stock markets. "Most 'money management' advice is folklore dressed in
Framework : A formula-based approach that calculates the ideal percentage of capital to risk based on a system's historical performance, expected return, and its largest historical loss. "Most 'money management' advice is folklore dressed in
f = (bp * (1 + r) - 1) / (bp * (1 + r) + 1) "Most 'money management' advice is folklore dressed in