[Airelon]

Curious as to what money management strategies ones employ when it comes to their trading.

I just switched from a pretty basic "fixed % of capital" to using a modified version of Kelly's. Larry Williams may have been able to do it, but I personally could never conceive of just using a straight Kelly's formula to trade with. The risk you open your account up to is just huge during a winning streak. Mind you, the rewards are greater . . . but I'm just not comfortable with the risk.

So I modified it a bit . . . I used a 70% historical for the formula, and then when the whole Kellys subset is done, I multiply that by .3 - and will be risking that much. When I played with the numbers, it seems that it was above just the fixed 3% I was using (and therefore, had greater rewards - which is what Kellys formula gives you), but I wasn't opening my account up to a huge risk, as Kelly's will do to you when you have a winning streak.

In Excel, I keep track of all my trades, accuracy rates, drawdown, risk reward ratio's, etc. Then from some of those cells, I pull out my risk formula, that looks like this:

=Account Size*((Current Trading Accuracy-((1- Current Trading Accuracy)/0.70))*0.35))*0.3

And wala! What I call: Kellys S.

The /.70 ? That's the "historical rate" that I plugged in. Where it says "Current Trading Accuracy" ? That number varies, according to how well my calls are doing, and is pulled from an Excel Column. . .