Risk Control, Risk Assessment, Risk ManagementWhy do the professionals make consistently high incomes from trading stocks?
They always control and manage their risk. They use the candlestick patterns as support and resistance levels and allow the stock to "breathe" within a range they have determined is a natural price movement up and down within a tight consolidation, which is what the professionals prefer to trade.
Professionals do mitigate risk on huge-lot orders over 1 million - 5 million shares or higher. They may use Option Puts, e-minis, futures, or spots--whatever they decide for that specific stock trade they have entered and are holding with the intent of having HFTs gap or run the stock upward at market open.
Professionals calculate their risk versus the Run Gain Potential for that individual stock. This provides the Risk vs. Profit gain that can be estimated with a high degree of accuracy.
When you trade any stock, if the stop loss placement makes you nervous, do not tighten the stop loss order price.
Instead, find a lower risk stock with good support very close to your entry price.
