PFwise.com Monthly Newsletter
Help you make wise personal finance decisions
Hello friends, welcome to the May 2016 PFwise.com Monthly Newsletter!
Imagine you found a magic winning strategy in the stock market: every trade you had 80% chance of gaining 3%, and 20% chance losing 5%. Would this great strategy make you a billionaire quickly? Not a chance if you don't know risk control!
1. The Importance of Risk Control
Why risk control is so important even you have a winning strategy in a game? From this simple game you can understand it right away.
2. The Magic Optimal Risk Control Formula
Now you see the importance of risk control, how do you actually implement it in each of your trade? Kelly formula is that magic formula you need to know!
3. Maximum Compound Growth Rate
After mastering Kelly formula, what will be your long term investment growth rate with your winning trading strategy? Another simple yet powerful math formula will give you an idea, it relies on the famous Shannon Entropy.
4. The Low Math Way to Risk Control
If you find the math formulas we introduced daunting to grasp, don't worry, we introduced a low math way to do risk control in your investment, everyone should master it and put it to use without any problem!
Thank you for your readership! I hope through this newsletter you will have a better understanding of the importance of risk control in your investment activities!
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