Sit on Hands, when risk per trade is too big?

[smallfil]

Hello,

Per my risk management rules so far, I can only risk max $200 per trade trading the CL, however today, the setups are clear, but the risk far exceeds my risk tolerance rules. I missed alot of good money by not increasing my risk to like $300. So, I just pass on the trade. But its pretty tempting to not jump in and take the increasing my risk just for today, but I will be pissed starring at the big loss afterwards. And this leads to other mistakes and emotional bad day.

Is this the part of risk management trading, I often read and hear about regarding protecting capital, if the risk too big, I have two choices decrease position size, or sit on hands?

If so, at least I know I am doing the right thing.

Thank you,

You should be looking at multiple trades so that, you have a couple to choose from. Not every stock will have the same risk to reward ratios. Over time, by being disciplined, you will do so much better because you stuck to your rules.

 

[SimpleMeLike]

If the current market conditions don't fit with your strategy and risk management, just stay out ...

Investing/trading is not only about the money you make but also about the money you don't lose.

Thank you DevBru,

I like this. Good comment.

 

[RedDuke]

If risk is too big, I always stay out. Having no positions, is also a position.

 

[SimpleMeLike]

Having no positions, is also a position.

Thanks RedDuke,

I like this.

 

[imjohn]

Intraday, many of the best days in a given year are typically the most volatile. You should come up with a way to adapt your strategy / position size to times of increased volatility, so you can take advantage of the increased signals and movement. Lower contracts or switch to micros if you're just trading 1 contract and keep it moving.

 

[Turveyd]

I risked 1 NQ short only going to risk short, lasted 4mins and made me 30pts that'll do, back into hiding.

Worst risk being, Circuit breaker goes in and opens back up 500pts in the red = Massively in debt, not worth the risk.

Stay safe, wait for calmer times IMHO!!

 

[Sekiyo]

TST’s risk parameters wise,
It’s like playing the Russian roulette.
You have 5 chances out of 6 to make it big,
But if you ain’t lucky or just playing too much,
Then you’re dead ...

Luckily my pro account ain’t set yet.
Otherwise I might had done a full reset.

God BlesSs

 

[Esha.J]

If the current market conditions don't fit with your strategy and risk management, just stay out ...

Investing/trading is not only about the money you make but also about the money you don't lose.

Very truly said it is better to stay out from such situation where you known the probability of loss is high and fear of loss may tend the trader to take wrong decision by which he will loose even the capital amount invested.

 

[SimpleMeLike]

You should be looking at multiple trades so that, you have a couple to choose from. Not every stock will have the same risk to reward ratios. Over time, by being disciplined, you will do so much better because you stuck to your rules.

Thank you smallfil,

This is a good point you mentioned.