Tag: risk management

I talk a lot about trading psychology on this blog and in my books because, after three decades in the markets, I know it’s the difference between success and failure.…

Life and business are inherently risky. Every day, whether you’re an individual or an institution, you risk suffering damage or financial loss. Nevertheless, not all hazards are the same. Prioritizing…

Risk management is the specific parameters traders put in place when trading to limit the losses on positions that go against them. Stop losses, position sizing, and trailing stops are…

What is a trailing stop loss? A trailing stop loss is a risk management tool for locking in profits on a winning trade. A trailing stop is a strategy that…

Here are my top picks for the best books on risk management for traders. These books cover the importance of position sizing, stop losses, trailing stops, total risk exposure, leverage,…

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…

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…

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…

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…

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…