Money management is a term used often in the trading and gambling community. It involves deciding how large a position to take on trade entry, how to scale into or out of a position, etc. It also involves setting aside enough capital that you can make more than a few mistakes and still not blow up. Sometimes it involves averaging in when price goes against you (very dangerous), other times it involves taking profit on part of a position and keeping the rest of the position in case you have a “runner”. Done well, money management can amplify the value of your entry/exit signals.

Risk management is more of an institutional term. It involves statistical models for such metrics as VaR (value at risk), CVaR (conditional value at risk) and many others. Risk managers at banks, hedge funds, brokers, etc. will estimate portfolio risk across managers, across instruments, etc. to comply with financial regulations, and to reduce the chance that they’ll be exposed to deep losses in case of a big event in the market. They will also look at subjective things like counter-party risk, technical risk, model misspecification risk, etc. In this sense, Risk management attempts to manage all the material risks a firm faces.

Position Sizing™ is a trademarked term invented and used, mainly by Van Tharp in his writings.Position sizing is the part of your trading system that tells you how many shares or contracts to take per trade. Poor position sizing is the reason behind almost every instance of account blowouts. In other words, position sizing basically refers to the size of a position within a particular portfolio, or the dollar amount that an investor is going to trade.

So, basically all three terms mean the same thing, except that Money Management is a very general term, used by Investors, Traders and Gamblers, and also by people not connected with any of these, who view money management as the process of managing money which includes expense tracking, investment, budgeting, banking and taxes. Risk Control is a specific term, with an underlying institutional context, whereas Position Sizing™ is a specific term used in the context of trading and investment only.
What I intend to discuss here, is therefore all the above three in the context of Investing, and Trading.

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