Your success as a trader has little to do with selecting the right investment or even having a great system. Instead, it has everything to do with the “how much” factor when you invest or trade.
Investment professionals have called this factor “asset allocation” or “money management.” However, they fail to understand that the key aspect is “how much” to invest in any position. Others work hard to get themselves a good system but fail to realize that position sizing™ strategies are the key to getting what they really want.
When you have a great trading system, it’s certainly easier to meet your system objectives through your position sizing method, but you can still meet your objectives and profit with an average system if you understand how to properly position size. Yes, your position sizing strategy is that important.
Each trader has a unique set of trading objectives, and it is through position sizing, not your trading system, that you meet those objectives. That’s how important position sizing is for you as a trader. In this book, you’ll learn how to specifically define your objectives and how to apply various position sizing models to maximize your chances of meeting them.
In the Definitive Guide to Position Sizing, you’ll be introduced to Dr. Tharp’s System Quality Number® score, which shows you how to accurately measure the quality of any trading system under any market condition. The higher your System Quality Number score, the easier it is to meet your objectives through position sizing.
Dr. Tharp goes on to present 93 different position sizing models. Each of those models, in turn, could easily have many different variations.