risk management

what is risk management

What is Risk Management?

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 potential probabilities of risk events. Risk management implements cost effective processes to use available resources to measure, minimize, and limit the impact and damage of both common …

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The Ultimate Trading Risk Management Guide

A Risk Management Process for Traders

In trading and investing, risk management is defined as the process of understanding, identifying, adjusting and managing all of the potential risks that an account is exposed to so the size of losses and drawdowns are minimized for the magnitude of negative impact they will have on a systems risk of ruin and long term profitability. Some examples of possible risks to investment …

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Current DIA Chart

Using Moving Averages as Risk Management Tools

Moving averages are primarily used as trend indicators and trend filters. They are quantified technical trading indicators that can be used for backtesting and signal creation. Using moving averages to capture profitable trends are only one side of their usefulness.  What enables moving averages to work as profitable technical trading tools is their ability to …

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Why Account Size Should Not Determine Your Risk Management

Why Account Size Should Not Determine Your Risk Management

This is a guest post from Tino @tradersreality. This article originally appeared on tradersreality.com and is reposted here by request. Why Your Trading Capital Determines Your Trading Style The old saying goes, you have to speculate to accumulate. I agree, but what is the magical figure that allows you to accumulate, more so how does …

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Make Losses Affordable

Make Losses Affordable

This is a Trend Following Guest Post by Michael Melissinos Originally Posted on his Blog. Trend Followers don’t shy away from losses. Losses provide valuable feedback that helps them improve as traders. Sometimes, losses occur despite solid strategies and perfect execution. Such is life when participating in markets. Some trend followers break down, change their approach and …

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Trading: The Difference Between Playing Offense & Defense

  The sooner traders learn to carefully manage risk, the better off they will be. So many new traders come in with only the thoughts of profits dancing in their heads. This is equivalent to a football team only focusing on scoring points, and not planning their defense. In trading, you must play both sides …

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