“Something I’ve been wondering about that I haven’t yet seen in your books…”

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Hey Michael, thanks for all your insights. I’ve been listening to your podcast for a long time and I’ve purchased your books. Something I’ve been wondering about that I haven’t yet seen in your books (I’m still reading your books, Trend Following, and Trend Commandments, so there’s a good chance it’s in there and I’ll find it), is these top traders, trading client money or perhaps only trading their own money now, like Tom Basso: How much total exposure do they have in their holdings at any one time? Lets say they will risk 2% per trade on any one position. Have you seen that they will typically deploy all their capital / the entire fund into however many markets they’re trading for that program, and have 100% exposure? So at 2% risk per trade that would be about 50 markets they are trading at once in order to deploy the entire account. Is that how they typically do it? Or do they leave some cash or structure their portfolio another way?

Jay A.

You need a unit strategy for money management. There are max unit rules. One unit for 50 markets? That’s not the strategy. Two places to start: here and here.

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