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Risk Management

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Risk Management

Risk management is the management of risk inherent in trading by identifying these risks, assessing them and knowing how to control them. You can't control how much you may profit on each trade, but you can control how much you may lose. Poor risk management is one of the top reasons traders fail. Managing your risk exposure, by knowing what to do and what not to do, helps to prevent deep drawdowns or losing your trading capital. There is a variety of potential risks to take into account.

Good risk management is key to capital preservation and involves thinking about how much capital to employ, how much to risk on each trade, how many trades to make daily, weekly and monthly and what stop levels to use for each type of set-up. Also included in good risk management are what reward / risk requirements to enforce, how to employ money management, how to use a balanced portfolio and how to deal with correlations between open trades. Traders employing good risk management also consider what loss limits to set daily, weekly and monthly, how to calculate the overall expectancy of your trading strategy and how to avoid the risk of ruin.
GrantPeace GrantPeace PRO DAX, 240,
DAX: DAX CARNAGE
194 4 3
DAX, 240
DAX CARNAGE

Daxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

GrantPeace GrantPeace PRO USDRUB, 60,
USDRUB: USDRUB
60 0 1
USDRUB, 60
USDRUB

For my Russian friends

KellyBacile KellyBacile ETHUSD, D,
ETHUSD: ETH short squeeze
378 2 8
ETHUSD, D
ETH short squeeze

"A short squeeze refers to a jump in a stock's price, forcing a large number of short sellers to close their position, which in effect pushes the price even higher. When an investor shorts a stock, he borrows shares from another account and sells them, agreeing to replace the stock at a later date. Short sellers predict the price will go down, enabling them to ...

Turbo_Tech Turbo_Tech IWM, D,
IWM: Iron Condor IWM
13 0 5
IWM, D
Iron Condor IWM

Added a new Iron Condor on IWM last week. Devils details are on the chart. Looking to exit around 50% max profit.

renegadetrader8 renegadetrader8 PRO TREASURY_DIRECT/USDEBTOUT, W,
TREASURY_DIRECT/USDEBTOUT: Unrealized Projection of the US Outstanding Debt History (alarm)
Unrealized Projection of the US Outstanding Debt History (alarm)

US Outstanding Debt History Since 1790 (data from quandl)

Akil_Stokes Akil_Stokes PRO EURUSD, D, Short ,
EURUSD: EURUSD- Think Twice Before Selling at This Level
2130 15 48
EURUSD, D Short
EURUSD- Think Twice Before Selling at This Level

This coming Thursday we have the news that we've all been waiting for which is the ECB Press Conference to talk about QE and the Rate Decision and the markets have been looking for any hints that they can get on how to position itself for the upcoming move. As a technical trader, I don't look to involve myself in these types of moves due to the fact that the ...

JasperForex JasperForex PRO EURUSD, 30,
EURUSD: Trading the FOMC event
2396 26 53
EURUSD, 30
Trading the FOMC event

In 8 hours we will witness the perhaps most anticipated news event in Forex of 2015 so far. The FED will communicate their rate decision, accompanied by a written statement, economic projections and a press conference. The Dollar is fundamentally the strongest currency due to the expectation of a rate hike this year. This sets it apart from currencies like the ...

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