Understanding the nuances of position sizing and its implications for risk management is critical for success in trading. This often-overlooked aspect of a trading strategy holds the key to safeguarding your capital and maximizing your potential for long-term profitability. As traders navigate the complex world of the financial markets and their trade execution, managing risk […]
Position Sizing: Lessons for Risk Management Read More »
Financial education and literacy are more than just buzzwords; they’re essential skills for navigating the complexities of today’s economic landscape. Whether you’re a seasoned investor, a budding entrepreneur, or someone simply looking to make more informed money decisions, understanding the core principles of finance is crucial. In this article, we’ll delve into the four cardinal
Financial Education: The 4 Rules Of Being Financially Literate Read More »
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. The world’s best athletes are all in peak physical condition; what separates world champions from everyone else is their mental toughness, self-control, and discipline. This
5 Reasons Your Trading Account is Underwater Read More »
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 the risks you want to concentrate on is crucial since certain risks are more serious than others. You can achieve that with the use of
Risk and How to Use a Risk Matrix Read More »
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 all ways to manage risk in trades. Stop Loss Meaning A stop loss is meant to do exactly what it says, stop your loss. A
Risk Management in Trading Definition Read More »
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 moves the exit point for a trade as price moves in the right direction to increase profits. A trailing stop loss is a quantified strategy
Trailing Stop Loss Read More »
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, risk of ruin, and surviving losing streaks. Risk management is a crucial aspect to profitable trading along with a trading system with an edge and
Best Books on Risk Management for Traders 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 risk/reward ratio through the use of trailing stops for profitable trades and stop losses for unprofitable trades is the foundation of profitable trading.
The Art of Cutting Your Losses 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 or string of losses. When you are starting out as a new trader: “Trade small because that’s when you are
Trading Better Before Trading Bigger 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. – Oxford Languages In trading risk management is using processes to control, minimize, and protect trading capital from the many dangers in the financial
Do You Know What Risk Is? Read More »
