Abstract: 

This talk discusses the money management by starting from the martingale of playing roulette. First, we show the difference between the gambling and financial trading. Then we introduce the Kelly criterion, which provides a formula of bidding optimal fraction. Ralph Vince extended the Kelly criterion to the general case for traditional trading, called “Optimal f”. Furthermore, we discuss the leverage space model, which was used in the simultaneous games. In addition, the theories mentioned above are also experimented in the real trading world.