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Position Sizing Cheat Sheet

Position Sizing Cheat Sheet

Position Sizing isn’t random. It’s calculated based on ACCOUNT RISK (AR) and TRADE RISK (TR). A formula controls risk so we know exactly how many stocks, futures contracts, or forex lots to buy on a given trade. There are many ways to calculate position size. Here are a few simple ones:

What is risk management?

Risk Management

Risk management is used in all industries to mitigate the probabilities of the loss of assets. Its identifies, evaluates, and prioritizes the frequency and magnitude of the potential probabilities of risk events. risk reduction implements cost effective processes to use available resources to measure, minimize, and limit the impact and damage of both common and … Read more

How to Set a Stop Loss

A stop loss is set after a trade entry at the price level on a chart where a trader will accept being wrong and exit for a small loss. A stop loss should be placed at the level price should not go if the trade is correct.

Best Books on Risk Management for Traders

Best Books on Risk Management for Traders

Here are my top picks for the best books on risk management for traders. These books cover the importance of position sizing, stop losses, trailing stops, total risk exposure, leverage, risk of ruin, and surviving losing streaks. Risk management is a crucial aspect to profitable trading along with a trading system with an edge and the right psychology. A trader needs all three for profitability and risk management to simply not lose all their capital eventually.

Trailing Stop Loss

Trailing Stop Loss

A trailing stop loss is a risk management tool for locking in profits on a winning trade. A trailing stop is a strategy that moves the exit point for a trade as price moves in the right direction to increase profits. A trailing stop loss is a quantified strategy to keep a trader in a trend until the end when it starts to bend.