Trading Risk: Enhanced Profitability through Risk Control

by Kenneth L. Grant

Revolutionary techniques that traders can implement to improve profits and avoid losses No trader, professional or individual, can afford not to have a solid risk management program integrated into his or her trading system. But finding a precise mathematical model to replace subjective decision-making processes is a challenge. Traditionally, risk management has focused solely on loss avoidance, but in Trading Risk, hedge fund risk manager Kenneth Grant presents some-thing completely new―how to manage a portfolio to minimize risk and increase profits by putting more capital at risk. Trading Risk details a risk management program that can help both money managers and individual traders evaluate which elements in a portfolio are working efficiently and which aren’t. By illustrating an extremely simple set of statistical and arithmetic tools this book can help readers enhance their performance in many financial markets. Kenneth L.Grant is Cheyne’s Global Risk Manager, and is the Managing Member for Cheyne Capital, LLC, the firm’s U.S. arm. Mr. Grant is a pioneer in the field of hedge fund risk management and capital allocation. Before joining Cheyne, he created risk control programs at two of the world’s leading hedge funds, Tudor Investments and SAC Capital, where he was eventually promoted to the title of Chief Investment Strategist. Mr. Grant holds a Bachelor of Science in Economics and Mathematics from the University of Wisconsin, an MA in Economics from Columbia University, and an MBA from the University of Chicago Graduate School of Business.

Genres: Finance

Hardcover

First published June 1, 2004

Reviews

[Edward · Rating 5 out of 5]

This is incredible. all those books on how to assume risk mean nothing until you learn how to manage risk. this is the best I've read on risk management implementation.

[Dixon Liang · Rating 5 out of 5]

As a junior trader, I'm very happy I went through this book. The book provides guidance and ideas to help traders think about their trading in the perspective of pure risk taking. Even if a trader is wrong at calling market moves, a trader can still be successful in the long run if they have a sound risk management. Just as market participants will use statistics to determine market trends and market pricing, the author recommends traders do the same with their P/L and trading history. Through these statistics, traders gain significant insight about their risk taking which helps them continually make better risk decisions going forward.

I have no doubt the insight I have gained about "trading risk" from this book will follow me throughout my career and help me build an edge in the form of effective risk management methodology.

[Samuel Gruen · Rating 4 out of 5]

Useful mind framing literature on risk and trading.