Mastering Corporate Finance

By the end of Mastering Corporate Finance Essentials by McCrary (2010), it was clear what the book offered: accounting practices for multimillion dollar investments, Black-Scholes, Monte Carlo, and NPV.  Those themes were present throughout the text.  The situations presented through the questions at the end of the chapter were alright.

For the purposes of action items, the book served to increase the vision of what comes with a large account to balance. It seemed written for people working on the accounting end of management for firms, corporations, etc.

With this book complete, I'm moving to another finance book, Corporate Finance by DeMarzo (2014). Just a scan of the chapters and I see similar themes for the last, so this should cement some ideas while introducing others. It's a longer read.

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In terms of trading, there has been a week of inaction, although some listening to traders has been happening. Moving into 2020, the plan is to work on the ideas I presented in the last post. Basically, trades being 1:2 risk:reward generally, and at least 1 trade a week.  Next year, the goal is to double my paper trading balance with the strategy.  Trading view is still new to me, and I expect to grow dramatically in my understanding of it.

There are tools available to speed up your reading, look into them.  My goal is >1500 words/minute.  Decrease subvocalization, regression, and fixation.  Jump around, split the page into threes, read a word per section, scan chapters, then subheadings, then skim on through.

Tu vois le nombre huit, I see an infinity.

Many hours have gone to other endeavors as of late including job related study, personal health and fitness, and research for a business start up.  There's been much development in those areas, in line with my 4:1, give to take ratio.  Still, a yearning for more moves in trade has been growing.  There have been 3 notable trades since my last post. Using the MT4 app, the Buy/Sell Stops have been implemented; +$157, and two -$80 results.  This morning, two more trades will be entered balancing the buy and sell stops.  Interesting results are expected.

A little math in the notebook:

365-52 = 313 forex days a year

risking 2% per trade and making 52 trades a year,

you need to make about 70% a trade to double your money (risk) in a year.

x = reward
y = risk

system of equations:
x/y = 1.7
x + y = 52

y =19, x = 33
So I need to have <33 52="" a="" days="" good="" of="" out="" p="" risk:reward.="" trade="" with="" year="">
If I started with $1000, risking .02(1000) = $20, I can double the $20 to $40 with 33 good trades of 1.7:1 risk out of 52.  This doesn't take into account how 2% changes with each trade, but it gives a good gauge of how quickly I can build a small account with that metric.  After a year, $1040.  That's actually a 4% annual return when risking 2% of the starting account.  Something to keep in mind going forward.  I need more than that.