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
To manage the risk of ruin in trading position sizing should be managed to never lose more than 1% to 2% of total trading capital on any one trade. If a stock trader has a $100,000 account, ... Read more
After an entry the risk/reward ratio quantifies a trades potential for loss size versus the size of possible profits. When backtesting signals the average size of all the losing trades in a... Read more
The Risk of Ruin (Also called the RoR) is a statistical model in trading which quantifies the probability a trader will eventually blow up and lose all of the trading capital in their accoun... Read more
CAGR stands for ‘compound annual growth rate’ and is used in business, investing, and trading as a term for the measurement as a geometric progression ratio providing a constant... Read more
Here are ten reasons a stop loss is so important in trading: A stop loss defines your price risk by quantifying what price level you will exit a trade at. A stop loss helps define your trad... Read more
In trading as in life there are both risks and rewards to consider before you start any journey. You have to ask yourself are the risks of loss worth the possibility of the gains from the re... Read more
On trade entry the risk/reward ratio measures a trades potential for loss versus the magnitude of possible profits. In backtesting the average of all the losses in a system compared to all t... Read more
This is a Guest Post by Niclas Hummel, creator of the Risk Simulator and a trader living in Bangkok. A Monte Carlo simulation projects your trading system’s equity curve into the future. You... Read more
This is a Guest Post by Alex @MacroOps which was posted originally here: is reposted here The Psychology Behind Managing A 20 Bagger with permission. What do you do with a massively profita... Read more
