Stoic Talks

Stoic Talks

S01E10: “Wizard of Risk Management” with Ralph Vince

As you evolve in your journey of stock market investments, you soon realize that stock selection alone doesn’t really take you anywhere. Money management is perhaps the most important aspect of this game which cannot be ignored.

If you search the web for money management and risk management, your search most likely would throw out 2 names, Ralph Vince and Van Tharp. In today’s episode we share with you a fascinating conversation I had with Ralph Vince.

Please listen in.

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Ralph Vince is a trading systems expert and has programmed successful trading systems for fund managers and Sovereign wealth funds. Ralph is an authority on the subject of position sizing and his statistical techniques and Optimal F are the industry standards.

Notes:

[2:59]: How he started his journey into Stock markets?

[4:21]: Making more money trading Options than his job.

[6:12]: He started writing programs to make good systems.

[7:08]: His view on writing options & other strategies where Risk is unlimited.

[10:33]: View on Stop Loss, Naked options, Short call etc.

[12:39]: What is a Taleb’s system?

[15:49]: Be prepared for the worst case. Use brain only during building the system & not during executing it.

[17:34]: Best ideas never require any data or back testing.

[20:15]: What is a Good system indicator?

[31:32]: Best books to read.

[37:35]: Pyramiding & Dollar cost averaging.

[42:56]: Lay a strong foundation & stick to the plan.

[46:34]: Blame no one except yourself.

[49:04]: One should know his purpose & existence.

Books / Recommendations:

The Leverage Space Trading Model by Ralph Vince
The Mathematics of Money Management by Ralph Vince
The New Money Management by Ralph Vince
The Handbook of Portfolio Mathematics by Ralph Vince

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