|
|
 |
|
Viewing report
|
|
|
|
The Leverage Space Trading Model: Reconciling Portfolio Management Strategies and Economic Theory
John Wiley and Sons Ltd, June 2009, Pages: 191
In The Leverage Space Trading Model, Optimal f and quantitative portfolio analysis expert Ralph Vince takes the Leverage Space Model he presented in The Handbook of Portfolio Mathematics and pioneers into a entirely new territory. Market analysis and technical indicators are important to determine market direction but Vince claims that in and of themselves they are not enough and won't keep traders from inevitable failure. As Vince shows, even in a game where the trader wins in all but one trade out of a million, if the trader keeps doubling the bets, the trader will eventually go broke. Even if the trader doesn't use margin, he or she is still using leverage.
Leverage refers to the schedule upon which an asset position is increased or decreased over time as the equity account fluctuates. Traditional models do not reflect real world actualities of cash vs. the position and the schedule of adding or lightening that position. Vince shows that geometric returns (the 'space') matter more than arithmetic returns and presents a paradigm that seeks to maximize the probability of being profitable as opposed to maximizing profits. Psychologically, because this paradigm seems to minimize losses, which Daniel Kahneman showed we are hardwired to do, it is ultimately easier to implement -- and stick to.
Praise for The Leverage Space Trading Model
'As Warren Buffett said, 'It's only when the tide goes out that you learn who's been swimming naked.' We now know that most have been. It's too bad that Ralph Vince did not finish his book in 2005 or 2006, it would have helped save institutional investors and our nation trillions of dollars; few people understand the rewards of leverage and its inherent risks like Ralph. As we found out, most hedge funds and banks use leverage without knowing how to quantify its risks or rewards. This book is a must-read for anyone using or being responsible for risk. Leverage is one of our greatest empowerments.'
—Salomon Konig, member of the board of directors, Hedge Fund Association, Partner and Chief Investment Officer, Artemis Capital Partners, LLC
'Ralph Vince is almost alone in his study of trade sizing, but that doesn't mean he isn't right. Traders should read this book.'
—Euan Sinclair, option trader and author of Volatility Trading
'As we've seen recently, the gross misuse of leverage has been a hard lesson for institutions. But position sizing is critical to the success of all traders, big and small, and Ralph Vince brings fresh thinking to an area that badly needs it. He challenges the status quo and makes you think about what you're doing. He attacks the major flaws of MPT. There is no doubt that you'll benefit from Ralph's ideas.'
—Perry Kaufman, author of New Trading Systems and Methods, Fourth Edition and A Short Course in Technical Trading
'If Ralph Vince writes it, I read it...every word, every thought this guy has produced has led me to additional market profits. Money management is clearly the way to the kingdom of wealth in the investment world and Ralph gives you the keys in this book.'
—Larry Williams, trader, fund manager, and author of Trade Stocks & Commodities with the Insiders: Secrets of the COT Report and Long-Term Secrets to Short-Term Trading
Product samples
A sample for this product is available. Please Login/Register to download this sample.
Customers who bought this item also bought
A Guide to Active Credit Portfolio Management
The Universal Principles of Successful Trading: Essential Knowledge for All Traders in All Markets
Options on Foreign Exchange, 3rd Edition
Super Sectors: How to Outsmart the Market Using Sector Rotation and ETFs
Diary of a Professional Commodity Trader: Lessons from 21 Weeks of Real Trading
Winning Edge Trading: Successful and Profitable Short and Long-Term Systems and Strategies
Financial Risk Management: Models, History, and Institutions
The Invisible Hands: Hedge Funds Off the Record - Rethinking Real Money
AR: Absolute Return + Alpha
The Profitable Art and Science of Vibratrading: Non-Directional Vibrational Trading Methodologies for Consistent Profits
|
|
|
|
