Risk Management is the answer

[jimmysmith]

Risk management is really helpful in trading.

 

[Wide Tailz]

So are robots, if they cut losses for you when you are not there to take action!

 

[Darc]

Well risk management is a great answer. I've heard two or three traders say that what they focus on is how much can I lose on this trade rather than how much can I win.

Those "O'Neil Disciples" say they had a Win rate of 36% for one year or something. They managed 18000% after 7 years I think it is.

How many Traders beat a 50% win/loss rate? That means just to survive you have to cut your losers quick and let your winners run - risk management.

 

[deaddog]

Those "O'Neil Disciples" say they had a Win rate of 36% for one year or something. They managed 18000% after 7 years I think it is.

How many Traders beat a 50% win/loss rate? That means just to survive you have to cut your losers quick and let your winners run - risk management.

That's what I've been saying for years.

The response I get on ET is if it were that easy we'd all be millionaires.

Want to lose weight? Eat less and exercise more. If it were that easy we'd all be skinny.

Go figure!!

 

[Audrey2_]

Risk management is the key basis for a trader’s profitability. It should be studied and tested to understand how exactly you should act in the market in order not only to save your money, but also to increase your capital.

 

[Wide Tailz]

Years ago I got curious about trading systems and did a lot of backtesting.

There were two ways to kill a profitable system (gradually or all at once, unexpectedly):

1. Stops too tight

2. Averaging down

 

[deaddog]

Years ago I got curious about trading systems and did a lot of backtesting.

There were two ways to kill a profitable system (gradually or all at once, unexpectedly):

1. Stops too tight

2. Averaging down

Are the stops too tight or is the entry placed in the wrong spot?

 

[Wide Tailz]

For that system, the stop was basically unnecessary because it was based on a volatility breakout. It was just better to get out on a trend reversal.

However, I never tried an S/R algo which could probably use tight stops, based on the success people are having.

Very good question! It is definitely specific to the system being run.....

 

[syswizard]

Years ago I got curious about trading systems and did a lot of backtesting.
There were two ways to kill a profitable system (gradually or all at once, unexpectedly):

1. Stops too tight
2. Averaging down

Stops must be set according to volatility. Fixed stops do suck !

 

[Abbas Ali Khan]

Risk management is the key basis for a trader’s profitability. It should be studied and tested to understand how exactly you should act in the market in order not only to save your money, but also to increase your capital.

sometimes our risk management will works to fail after having good knowledge and experience.