011: Ralph Vince talks position sizing, the different applications of optimalf, trading horizon, diversification and his changing views over 25 years.
Better System Trader
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How to Manage Drawdown?
As one loses money, one covers a path from the peak, or some point less than the peak, toward zero. As the equity in the account diminishes, that path increases towards the optimal point. So we're no longer on just a single point on the curve, but we're actually traversing a path on the curve. And andats very important in understanding this. Because some criteria, let's say, expected growth maximization, requires us just being at ana stationary point. Other criteria require traversing path through this surface.
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