What is position sizing & why is it important? Position size refers to the amount of risk - money, contracts, equity, etc. - that a trader uses when entering a position on the financial market. We assume, for ease, that traders expect a 100% profit or loss as a result of the profit lost. Common ways to size positions are: Using a set amount of capital...
When it comes to investing and trading, risk is a constant factor that requires careful consideration. Let's explore the concepts of systematic and non-systematic risk: Deeper Dive Market risk and non-diversifiable risk are other names for systematic risk. It is the kind of risk that is intrinsic to the entire market or a particular area within it and cannot...
What portion of your equity should you risk for your trading positions? In the today's article, I will reveal the types of risks related to your position sizing. Quick note: your risk per trade will be defined by the distance from your entry point to stop loss in pips and the lot size. 🟢Risking 1-2% of your trading account per trade will be...
🎉 Risk Management tip for Vesties and @TradingView community! 🚀 😲 We all know the saying "only risk what you can afford to lose," but do you know the powerful impact it can have on your trading journey? 🤔 In the ever-evolving world of cryptocurrency and futures trading, one fundamental principle stands as the cornerstone of profitable and sustainable...
1️⃣ Thou shalt have a trading plan: Having a trading plan is crucial to my success in forex trading. By setting clear entry and exit points, as well as defining my risk tolerance, I am able to trade with discipline and avoid impulsive decisions. 2️⃣Thou shalt not risk more than you can afford to lose: I understand the importance of capital preservation. I...
Risk management refers to the techniques used to identify, evaluate, and mitigate the potential risks associated with trading and investing. Whether you are a day trader, swing trader, or scalper, effective risk management can help you minimize losses and protect your hard earned money all while maximizing potential profits. Let's take a look at the top 7 risk...
This topic is so important, that´s why I wanted to share it with you and hope I can reach as much people as possible. Hope it will help some :) I saw in the last years many who crashed their accounts very hard, they lost a lot of money and for some it was very dreadful! It is hard to watch this people how they burn money and bring even his own family in...
Today’s topic is going to be on three types of stop losses . This is a very critical topic because stop losses come under the category of risk management. Risk management is such a pivotal, important and critical topic. Why? Because professional traders and investors, the first thing that they always do and constantly think about before they get into a trade or...
❤️Risk management is a crucial component of forex trading to help minimize potential losses. In this article, we’ll explore the do’s and don’ts of risk management in forex trading. 🧡DO’S 💁🏼♀️Set a stop-loss order: A stop-loss order is a pre-set level at which a trade will automatically close, thus limiting the loss on an open position. 💁🏼♀️Diversify...
When an investment's value fluctuates, the amount of money required to bring it back to its initial value is equal to the amount of change, but with the opposite sign. When expressed as a percentage, the gain and loss percentages will be different. This is because the same dollar amount is being calculated as a percentage of two different initial amounts. 📌The...
👉🏻The world of investing can be a wild ride, full of twists and turns that can lead to either high gains or crushing losses. That’s why it’s important to understand the different risk levels that come with investing in various assets. Let’s explore the three main categories of investment risk levels: low, moderate, and high. 💹Low Risk If you’re risk-averse and...
As we wait for GBP CPI news later today and the BOE rate hike decision on thursday , its good to remind ourselves that one trade doesn't make us its a marathon not a race . The volatility associated with these fundamentals is always a double edged sword . STAY WOKE
📚 #Risk_management Risk management in forex for retail traders is essential, especially considering the use of leverage. Leverage allows traders to control larger positions in the market with a smaller amount of capital. While leverage can amplify profits, it also increases the risk of losses. Here's how risk management and leverage factor into forex...
Hi Everyone, This tutorial is a live backtest demonstration of a basic Dynamic DCA strategy using my Bitcoin Risk Metric and how it performed in the 2018-2021 BTC market cycle. The risk metric quantifies the risk of buying BTC at any given time, highlighting periods of overvaluation and undervaluation. A Dynamic DCA strategy allows the user to: Accumulate...
Using R multiples is one of the most widely used strategies by professional traders for managing risk and tracking results. The R multiple concept is extremely easy to use and implement into your own strategy. With this simple idea, money management will become a breeze! If you have any questions or comments I would love to hear them!
📍 What Is a Trailing Stop? A trailing stop is a modification of a typical stop order that can be set at a defined percentage or dollar amount away from a security's current market price. For a long position, an investor places a trailing stop loss below the current market price. For a short position, an investor places the trailing stop above the current market...
⚜️Forex trading can be an intimidating venture for beginners, but don't let that scare you off! With the right mindset and a few basic rules, you can start trading confidently and profitably in no time. In this article, we'll go over five essential rules for forex market beginners that will help you navigate the trading world with ease. ⚜️Rule 1: Understand the...
On Day 1, a trader is just a passenger in a car that is controlled by others... This journey is so common that when people realize others are doing the same thing, they don’t feel so alone. I have talked with thousands of traders through the years and the vast majority of them experience this journey just as I have. Most start out so pissed off with life that...