Chapter seven. BY WHAT MEASURE?

Mature understanding of and respect for risk is the hallmark of the best traders. They know that if you don't keep an eye on risk, it will set its eye on you.

Akey question, perhaps the only question, to ask when you are considering a system-based trading strategy or trying to select a fund advisor who uses such a strategy is: "How can you know whether a system or a manager is a good one?" In general, the answers the industry offers are various takes on the following: The strategy or manager with the highest risk/reward ratio.