The risk of ruin formula shows the probability a trader could lose enough of their trading capital that the return to even or being profitable is near zero for that account. The concept of t... Read more
What is a good stop loss percentage? The answer to this question depends on a lot of the variables of each individual trader. The two biggest factors are how big position sizing is and how b... Read more
There is a common saying on Wall Street “Let winners run and cut losers short.” This quote tries to express the principle of creating big wins or small losses. Creating a high ri... Read more
One of the biggest errors that new traders make is trading too big. If you trade too large of a position size you will inevitably give back any profits you earn with your first losing trade... Read more
Do you really understand what risk is? What is risk? Risk is a situation involving exposure to danger. Risk is to expose (someone or something valued) to danger, harm, or loss. – Oxfo... Read more
The art of selling a losing position is a key skill in the science of risk management. When you are in a trade that is losing money you have to know when it is time to exit and accept the lo... Read more
A risk management process for a trading system is not just math but also includes human psychology. The psychology of execution is just as important to profitability as the trading dynamics... Read more
A martingale strategy is a betting method designed for games where the gambler wins a 50/50 bet like a coin flip wins landing on heads and loses on tails. This strategy betting structure has... Read more
Here is a stock market game that Danny Merkel @ChartingTrends shared on Twitter this year. This is a card game that simulates the importance of position size and trading through sequences o... Read more
Risk management is used in all industries to mitigate the probabilities of the loss of assets. Risk management identifies, evaluatates, and prioritizes the frequency and magnitude of the pot... Read more
