Risk control tends to be the last thing that most traders focus on, perhaps because of the popular belief that it's their trading strategy that will generate great fortunes. But ultimately, a strategy alone won't create riches. A trader or investor needs to develop discipline, a strong financial psychology, and a sound money management system to maximize profits and keep them out of financial danger. In A Trader's Money Management System , veteran trader Bennett McDowell offers readers an expert guide to the most important elements of money management in trading. McDowell shares his personal money management system, with the ultimate goal of helping you design your own system, customized to fit your risk tolerance, your experience level, and financial needs. He identifies the six types of risk to consider every time you make a trade--trade risk, market risk, margin risk, liquidity risk, overnight risk, and volatility risk--covering each in detail. In easy-to-understand terms, the author then breaks down his system into five key elements. He first explains the psychology of risk control , telling what issues to look for and how to address them in order to more effectively implement your money management system.

McDowell then details a variety of stop-loss approaches and gives you tips on how to make sure you adhere to them when they're hit. He follows with a discussion of trade size , showing how to determine how large or small your trade size should be so that you are not overextending your risk. McDowell then covers the crucial element of record keeping , and explains how it pays significant dividends. Finally, he shows how to design a realistic personal plan --one that you will continue to use and profit from. This book also equips readers with two valuable tools: A one-month free trial of Trade Size Calculator software and The Trader's Assistant recordkeeping materials. The trial Trade Size Calculator software is downloadable at www.traderscoach.com (see Appendix A for details), and The Trader's Assistant recordkeeping materials can be photocopied directly from the book.

These two tools complement the text and together provide a complete package that will deliver better results to your bottom line.