risk management for day trading

[IN2WIN]

Quote from Gladiator4444:

Hi everyone, I am a new member on this site...and i find it to be very helpful.....

I've been daytrading for a few months now...and I find it very difficult to keep my losing days small compare to my winning days...I think I am having problem knowing when to stop and when to push more....at this point I don't know how to solve this problem......ANY HELPFUL ADVISE WILL BE GREATLY APPRECIATED

thanx,

Gladiator

I am wondering if (1) you have a strictly defined profitable system that you tested first in both back testing and live paper trading before you began trading money.

If you do have one, and it worked well over a period of 2 ot 3 years, with at least 6 months of that being live paper; then the only question left is: (2) "Are you adhering strictly to you method?"

If the answer to both of the above is not an emphatic YES, then stop trading money until you can answer yes to both

Best of luck

 

[Yannis]

Quote from IN2WIN:

I am wondering if (1) you have a strictly defined profitable system that you tested first in both back testing and live paper trading before you began trading money.

If you do have one, and it worked well over a period of 2 ot 3 years, with at least 6 months of that being live paper; then the only question left is: (2) "Are you adhering strictly to you method?"

If the answer to both of the above is not an emphatic YES, then stop trading money until you can answer yes to both

Best of luck

IN2WIN,

Very good summary of an approach that a new trader should follow. I would add something about using a good simulator instead of just papertrading (but maybe you are including the tool in your general term "paper.") In this way, you can also see realistic fills, appreciate the maginitude of slippage that your method entails, and get a better feel for some of the emotional aspects of trading.