Risk Management

Risk management is the most underrated skill of a profitable trader. One bad red day can easily wipe out several green days.

Reduce your share size if:

• You aren't well rested.

• Your state of mind is altered (i.e. you are agitated, nervous etc...).

• The setup is higher risk.

• Your stop loss is further away than normal.

Important to remember:

• Have a maximum daily loss goal.

• Profit/loss ratio of at least 2:1.

• Have a predetermined stop loss and profit target before entry.

• Honor your stops.

• Track all trades.

• Enter trades after confirmation for lower risk entries.

• Don't chase.

• Don't be greedy.

There are hundreds of trade opportunities every day; chasing a bad trade takes your focus away from finding them.