Set the stop where the idea is wrong, size the trade from it, then check the target pays at least 2 to 1. A worked example, and why chasing breaks…
Risk & Money Management
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Read these first, in order
- Is trading gambling?Is trading gambling? It depends on how you trade. Learn how a casino stays consistent over many bets…
- The 2% position-size ruleThe 2% money management rule is one professional traders use and many retail traders miss. This post shows…
- Where to put your stop lossSet the stop where the idea is wrong, size the trade from it, then check the target pays…
- How much leverage to useLeverage should come out of your position size, never go into it. How to work it out from…
- Risk of ruinThe risk of ruin formula, a worked example, and a simulated table showing how risk per trade turns…
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The risk of ruin formula, a worked example, and a simulated table showing how risk per trade turns the same winning strategy from safe to likely broke.
A trailing stop loss follows price up and never moves down. How it locks in profit, how wide to set it, and the gap risk no stop order can fix.
Volatility is how much a price moves. Risk is how much you can lose. Why a calm stock can be the riskier trade, with a worked position-size example.
There is no single safe percentage. Use the Zero Test: what losing the whole position would cost you. With the arithmetic for 5%, 10%, 20% and 50%.