Weekend ramblings: Risk Management

Had an interesting discussion with Dave around risk management and read some of FL's thoughts and methods on that topic. Makes very good sense and might be the missing piece in my trading journey. I'm confident about my method and the expectancy is quite acceptable. What needs to be accounted for is the change I've introduced few weeks ago, namely 'diversification'. Now that I'm trading metals, currencies, notes, and soon Gas & Crude, on top of stock indices, managing what size I enter will be crucial and will need a disciplined approach on how I spread the size and risk on all these markets. Can't just rely on what the setup looks & feels since my goal is capital preservation before thinking about profits.

Here's a link for future reference that has great insights on risk management and position sizing albeit most discussions are on stocks and optimal number of shares. How about futures contracts guys???

I spent some time working FL's spreadsheet and created the 3 columns he talked about in his discussion posted on monkeys.dacharts.com