Phantom of the pit $ mgmt Strategy - Going in 3-1-1-1

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PTCM
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Phantom of the pit $ mgmt Strategy - Going in 3-1-1-1

Post by PTCM » Mon Aug 15, 2005 1:01 pm

Phantom of the pit $ mgmt Strategy - Going in the market in a 3-1-1-1 fashion

3 lot
1 lot
1 lot
1 lot



The strategy is under rule no.2.

http://www.trading-naked.com/library/Ph ... 0_Pits.pdf


Also, do you believe the first 3-lot is sujected to

a) the max amount of risk ?
b) all-in mode
c) same ?


BTW, does anyone know who this guy is ? a trader with 30-yr experience ???

sluggo
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Post by sluggo » Mon Aug 15, 2005 6:43 pm

A quick Google search didn't find any products for sale that include this methodology, nor any test reports from people who put it into a computerized testing platform and simulated its performance on historical data. That's rather odd; the publication is almost eight years old. Yet no one is marketing the idea as a proven money maker. Not even Murray Ruggiero or Ryan Jones or Van K. Tharp, and those guys sell everything.

Maybe this is a wonderful idea and a powerful machine for effortlessly cranking out immense profits. But it appears that nobody is saying so.

imgunn
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Re: Phantom of the pit $ mgmt Strategy - Going in 3-1-1-1

Post by imgunn » Tue Aug 16, 2005 11:56 pm

PTCM wrote:Phantom of the pit $ mgmt Strategy - Going in the market in a 3-1-1-1 fashion

3 lot
1 lot
1 lot
1 lot



The strategy is under rule no.2.

http://www.trading-naked.com/library/Ph ... 0_Pits.pdf


Also, do you believe the first 3-lot is sujected to

a) the max amount of risk ?
b) all-in mode
c) same ?


BTW, does anyone know who this guy is ? a trader with 30-yr experience ???
From my understanding its 3:2:1, not 3:1:1:1

Not sure if i am understanding your question exactly so here goes

a) the max amount of risk is halved for the 1st lot.
eg. you want to risk 2% of $1000
so total risk on this trade is $20

so instead of just putting $20 on in the trade all at once you break it up into the 3:2:1 ratio :

divided by 6 (3+2+1 = 6)
So $20 / 6 = 3.33
1st pyramid amount 3 is worth $9.99 (3 x 3.33)
2nd pyramid amount 2 is worth $6.66 (2 x 3.33)
3rd pyramid amount 1 is worth $3.33 (1 x 3.33)

in the article he talks about halving your losses through this strategy, so to me that would indicate you take your maximum risk and break it up into the pyramid as i did above.

PTCM
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Re: 3:2:1

Post by PTCM » Thu Sep 01, 2005 11:57 pm

There is a function, "positionprofit" in TradeStation that tracks the mark- to-market P/L, you could use that to dertermine whether you want to increase your positions. ie, when that number is +, you add more, if - ,you stay with your existing positions or remove the initial positions.
From my testings, this simple anti-martingale strategy raises both win/loss ratio and profit factor.

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