What does “Memento Mori” mean? It is Latin for ‘remember that you must die’ [one day]. The most successful generals in ancient Rome were awarded a “triumph” entry int... Read more
A stop loss is set after a trade entry at the price level on a chart where a trader will accept being wrong and exit for a small loss. A stop loss should be placed at the level price should... Read more
The idiosyncratic definition means to relate to idiosyncrasy; peculiar or individual. It is a distinctive or peculiar feature or characteristic of a place or thing. Idiosyncratic risk is one... Read more
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
