Things to Consider in Setting Money Management Rules – Part 2: RISK TOLERANCE

In setting a suitable money management, you should also consider the maximum drawdown you are willing to accept, which depend on your risk tolerance. In this case, do take into account the reasonable percent return required to recover to breakeven when you experience a certain percent of losses (drawdown), as discussed in the previous post. Then, set money management rules based on your risk tolerance (expressed in terms of percentage of the total...

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