Expectation
“…although it’s important to have an effective trading methodology, it is equally important to develop a methodology to determine how much capital to risk. A trader that risks too much increases their chance that they will not survive long enough to realize the long run benefits of a valid trading strategy. Risking too little creates the possibility that a trading methodology may not realize its’ full potential. Therefore, while a positive expectation may be a minimal requirement to trade successfully, the way in which you are able to exploit that positive expectation will largely determine your success as a trader.”
Dave Stendahl
