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.
YaseenG.Housari YaseenG.Housari USDJPY, 240, Education
USDJPY: "Trade Like A Casino" (Trading Psychology)
692 10 25
USDJPY, 240 Education
"Trade Like A Casino" (Trading Psychology)

What is the best way to make money on gambling? Own a casino. - Casinos operate as a business. - Casino have table limits to manege and their customers are likely to risk it all. - Casinos have a mathematical edge, and gamblers are at a disadvantage. - Casino has no ego or emotion, but gamblers do. Now what give us a trading Edge: .Trends .Support and ...

Pato99 Pato99 (REPBTC*0.02+GNTBTC*0.02+DOGEBTC*0.02+LTCBTC*0.05+ETHBTC*0.2+DASHBTC*0.04+XMRBTC*0.03+ICNXBT*0.02+STRBTC*0.1)*XBTEUR, D, Education
(REPBTC*0.02+GNTBTC*0.02+DOGEBTC*0.02+LTCBTC*0.05+ETHBTC*0.2+DASHBTC*0.04+XMRBTC*0.03+ICNXBT*0.02+STRBTC*0.1)*XBTEUR: Managing a 100.000,00 EUR longterm Crypto Portfolio
Managing a 100.000,00 EUR longterm Crypto Portfolio

This is my current Portfolio of crypto coins. Seperate investments like FACTOM are not included, I only use the coins which will stay in my "retirement" portfolio and which I think are the coins with the best future development. The rates are as follows: REP 2% GNT 2% DOGE 2% LTC 5% DASH 4% ETH 20% STR 10% ICN 2% XMR 3% The chart represents the total value of ...

LewisGlasgow LewisGlasgow PRO GBPJPY, 60, Education
GBPJPY: Tips for Growing a Small Trading Account
4349 69 237
GBPJPY, 60 Education
Tips for Growing a Small Trading Account

Tips for Growing a Small Trading Account Hello traders, I'm back with another educational post after receiving a lot of positive feedback. Today I'm going to provide you with five tips for growing a small trading account! 1. Define your why As you all know 90% of traders fail, it's a well-known fact and it's the main reason why I provide so much free content... ...

YaseenG.Housari YaseenG.Housari EURUSD, 60, Education
EURUSD: "Kinds of Bets or Trades" (Risk management)
1153 9 62
EURUSD, 60 Education
"Kinds of Bets or Trades" (Risk management)

"There are really four kinds of trades or bets: good bets, bad bets, winning bets and losing bets. Most people think that a losing trade was a bad bet. That's absolutely wrong. You can lose money even on a good bet. If the odds on a bet 50/50 and the pay off is 2$ vresus a 1$ risk, that's a good bet even if you lose. The important point that if you do enough of ...

a.b a.b PRO EURUSD, 60, Education
1057 32 98
EURUSD, 60 Education

A simple matrix correlating RISK/REWARD vs WIN/LOSS ratios. What do you think? Where do you stand? 1, 2, 3 or 4?

Tradewonk Tradewonk TOP EURGBP, 240, Education
EURGBP: When Not To Take A Trade
2624 33 167
EURGBP, 240 Education
When Not To Take A Trade

Every sunday i watch all pairs, draw the strongest fresh supply & demand zones and set the alarm. But do i always take the trade when the price hit the zone?

Tradewonk Tradewonk TOP GBPUSD, D, Education
GBPUSD: Maximum Drawdown
1938 14 151
GBPUSD, D Education
Maximum Drawdown

Drawdowns on your account are part of trading but if you establish a trading plan then it will enable you to survive these losses and not wipe out your account.

JasperForex JasperForex PRO EURUSD, 30, Education
EURUSD: Stop Losses, Love Them Or Hate Them
4460 66 51
EURUSD, 30 Education
Stop Losses, Love Them Or Hate Them

Stop losses aim to end a trade when the market goes so far in the opposite direction, that the trade idea no longer makes sense. It’s the point of invalidation. Ideally, they get hit on bad trades only and not on good trades. The area between entry point and stop loss is a zone where the trade is at a loss, but can still recover. This is not an invalidation of the ...

yuri72 yuri72 SCBTC, M, Education
SCBTC: Compare your altcoins to bitcoin not to fiat. Educational
202 7 5
SCBTC, M Education
Compare your altcoins to bitcoin not to fiat. Educational

Comments, input, more than welcome :)

Mase_00_7 Mase_00_7 PRO USDCAD, 15, Education
USDCAD: How to Trade the News
140 0 5
USDCAD, 15 Education
How to Trade the News

How to Trade the News We see lots of new traders in the chat here on Trading View making poor decisions around news based trading. Yes, catching a big move can be profitable, but it is a gamble and one that we as money managers should not be willing to take. Ask yourself this, if you had $1m of client money at stake, would you bet on the direction of a short ...

bgj101 bgj101 PRO EURJPY, 60, Education
214 0 3
EURJPY, 60 Education

This is one method of trade/money management that we teach. This 3-position method allows you to RIDE THE WAVE....as long as its moving...................2EZ

Wave-Trader Wave-Trader PRO EURUSD, D, Education
EURUSD: Reasonable, safe and effective stop loss placement for Waves
3690 19 100
EURUSD, D Education
Reasonable, safe and effective stop loss placement for Waves

Hi fellows, In this educational post, You will learn where your stop loss is reasonable, safe and most effective and increase the rate of success. Stop placement is a professional skill. Trading without limiting losses is highly dangerous. When it comes to trading on waves and classical chart patterns then your stop loss should be there where it is safe and ...

jzulueta19 jzulueta19 LTCUSDT, 60, Education
LTCUSDT: Determining Entry Points - Litecoin (LTC)
261 2 7
LTCUSDT, 60 Education
Determining Entry Points - Litecoin (LTC)

Risk Management (RM) is a heavy part of trading any asset class. What amount of risk or loss are you willing to take? And how do you limit your losses? In my years of technical trading, risk can be limited by the entry point, buying close to support and selling upon the break of said support. This works both ways, up and down. Up and down you say? What does that ...

Mutondi Mutondi BTCUSD, 240, Education
BTCUSD: To Indicator or Not To Indicator?  - Eduseries Week 2
257 2 14
BTCUSD, 240 Education
To Indicator or Not To Indicator? - Eduseries Week 2

"I trade like I bath" - the words of a self-created guru trader who wanted to convince me to join his "Premium Group" a while back. Although by his very nature the gentleman was a scammer and made more money through "teaching", those words lead me on a path which to a greater level of certainty in my own trading and analysis. (By the time we had that interaction ...

Nico.Muselle Nico.Muselle MOD GBPUSD, 60, Education
GBPUSD: Stop Loss hunting and the whipsaw effect explained
635 0 28
GBPUSD, 60 Education
Stop Loss hunting and the whipsaw effect explained

Regularly we see price break out after a consolidation, only to suddenly reverse and break out to the other side. Then, we continue swiftly in the direction of the initial breakout creating a "whipsaw" effect. Why is that ? In simple words, it is the smart money that attracts retail traders by pushing in one direction (mainly breakout traders) and put their stop ...

ICmarkets ICmarkets PRO XAUUSD, 240, Education
XAUUSD: What is Margin?
149 0 7
XAUUSD, 240 Education
What is Margin?

What is Margin?

TomHall TomHall TOP EURUSD, 60, Education
EURUSD: Pips vs Profit - Which Do You Focus On?
1797 19 66
EURUSD, 60 Education
Pips vs Profit - Which Do You Focus On?

FREQUENTLY ASKED QUESTIONS Q: How much money do I put on per trade? A: I personally adjust my position size depending on the currency pair and stop loss difference to cap my loss at a maximum of 1% Q: How many pips do i look to achieve Daily / Weekly / Monthly. A: I never set percentage or pip goals, this can cause impulsive emotional behaviour which forces you ...

USDTHB: The best trading time for each pair of currencies
621 2 44
USDTHB, D Education
The best trading time for each pair of currencies

The foreign exchange market operates around the clock, so it is impossible for a trader to track every market and seize every opportunity. In forex trading, time is everything. In order to design an efficient and timely investment strategy, it is necessary to record the market for 24 consecutive hours of trading, so that traders in their own trading hours, to ...

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