Comments on: Price-Related Terms: Level, Top, Bottom, Range & Step http://www.pyramidinvesting.com/2009/10/10/price-related-terms/ Because consistent profits are achievable, after all! Sat, 24 Dec 2011 03:51:52 +0000 hourly 1 http://wordpress.org/?v=3.3 By: Sasa Jakovljevic http://www.pyramidinvesting.com/2009/10/10/price-related-terms/comment-page-1/#comment-27 Sasa Jakovljevic Wed, 14 Oct 2009 04:55:10 +0000 http://www.pyramidinvesting.com/?p=282#comment-27 Actually, I haven’t started much of an explaining yet – I am still defining terms and building a foundation for some REAL Pyramid Investing stuff. But thanks anyway! As far as money management and preparing for the worst case scenario goes, that is the whole chapter in my book. A lot goes into that analysis but great amount of investors actually never tackles that topic seriously (or they think they do). I would like to emphasize that the process of thinking goes the other way around. Based on prudent money management and the amount of risk you are able to withstand, you need to come up with the amount of capital you can dedicate to a certain pyramid (or multiple pyramids). Only after you know the amount of cash you deal with is that you embark on shaping pyramid with appropriate parameters and cost. If that results in small trading amounts, that’s what it has to be. There is no problem in trading small. Problems occur when we make assumptions and jump out of our depths only to start trading bigger and expect rewards neglecting risks. Proper way to do is to cover the worst case scenario first! Actually, I haven’t started much of an explaining yet – I am still defining terms and building a foundation for some REAL Pyramid Investing stuff. But thanks anyway!

As far as money management and preparing for the worst case scenario goes, that is the whole chapter in my book. A lot goes into that analysis but great amount of investors actually never tackles that topic seriously (or they think they do).

I would like to emphasize that the process of thinking goes the other way around. Based on prudent money management and the amount of risk you are able to withstand, you need to come up with the amount of capital you can dedicate to a certain pyramid (or multiple pyramids). Only after you know the amount of cash you deal with is that you embark on shaping pyramid with appropriate parameters and cost. If that results in small trading amounts, that’s what it has to be. There is no problem in trading small. Problems occur when we make assumptions and jump out of our depths only to start trading bigger and expect rewards neglecting risks.

Proper way to do is to cover the worst case scenario first!

]]> By: Charles Gervasi http://www.pyramidinvesting.com/2009/10/10/price-related-terms/comment-page-1/#comment-26 Charles Gervasi Tue, 13 Oct 2009 11:36:48 +0000 http://www.pyramidinvesting.com/?p=282#comment-26 This explains the basics of how to do this type of investing in a clear way. To prepare for the worst case scenario, how much money should be in the account at the beginning? I suppose the worst case is you hit every step on the way down with the price never stepping up: very unlikely. So it's a judgment call how much cash you need to make a particular pyramid work? This explains the basics of how to do this type of investing in a clear way.

To prepare for the worst case scenario, how much money should be in the account at the beginning? I suppose the worst case is you hit every step on the way down with the price never stepping up: very unlikely. So it’s a judgment call how much cash you need to make a particular pyramid work?

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