February 17, 2019
Risk Management II
February 17, 2019

Risk management

Hate it or love it , at some point you will lose a trade. Fortunately there are a number of things you can do to anticipate risk. For starters never risk more 3% of your account on a single trade and I repeat never do that. At the end of this article I will show you how to calculate the lot size you are supposed to open with varying conditions. Protect your position with STOPS, LIMITS and ORDER TYPES. There are a lot of order types such as trailing stops etc.

Set Proper levels such that your trade handle huge jumps or changes in price which in turn helps you protect you from losing your shirt when the market goes sideways. A stop that is too narrow may lead you to re-enter the market causing it to get stopped again.

Check your emotions too. Stay calm because this gives you the edge over other traders. Resist revenge trades just because you have lost before.

Create a trading plan and stick to it like your religion. A good trading plan is crucial to your success as it defines your trade, what you are willing to risk and how to look out for yourself when lighting strikes. Great traders always think about how much they can lose before entering a trade.

#Trade what you see on the charts and not what you want to happen

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