Risking your money without knowing how you would fill the gap if you lose it is utter nonsense. When executing a trade, plan A is what you will do with the profit you make, plan B should be what you would do if you make a loss.
Risk Management is the answer
- Thread starter Wide Tailz
- Start date
Risk management is the first building block to obtaining a positive expectancy trading system. When you have trained yourself to cut losses at a certain point and just go ahead and do it without second guessing yourself, it then becomes possible to track win rate and R multiple.
You can also get honest with yourself about the "trend" or "drift", and if you're on the wrong side of it. So much easier to think when you have no commitments.
Remember UPST? I hope my former co-worker is not still holding it. Last I checked he bought it all the way down, but that was before the latest "surprise".....
Averaging down worked for him in a couple other bear markets, but soon he will need to take out his money for expenses. Then what?
You can also get honest with yourself about the "trend" or "drift", and if you're on the wrong side of it. So much easier to think when you have no commitments.
Remember UPST? I hope my former co-worker is not still holding it. Last I checked he bought it all the way down, but that was before the latest "surprise".....
Averaging down worked for him in a couple other bear markets, but soon he will need to take out his money for expenses. Then what?
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well if you dont want to loose your hard earn money then risk management is always the answer.
yes it is. but to make a perfect risk management is not a minor deal , need a very long time of experience.
I agree, managing risk is one of the most important aspects to a trader’s success. Understanding the risk and preparing to trade accordingly with a thorough understanding is extremely important.
Is that not the same as developing a strategy full stop though?
Whatever you do, please refrain from disclosing your method. I've seen several working systems destroyed by being posted on this very site.
And to wax philosophical once again, the motion in the market that fuels your account trajectory is all the unstable orders placed by traders who are losing. Money flows from the many (losers) to the few who know their edge and keep it secret, or have inside information.
But the first step in keeping your money is to not lose it! This thread is for beginners.
