Posts

Showing posts from October, 2018

A lesson on Trade Risk Management

Image
My trading motto is "Be clear on my trade set-up and risk-reward, AND find out the catalyst for current stock price movements". Finding out the catalyst, as what I have mentioned earlier, is keeping up with market news. When we talk about managing risk and using a risk-reward ratio , it is about HOW MUCH WE GAIN when we are right and HOW MUCH WE LOSE when we are wrong .  First learn how not to lose, instead of how to win. Then we perform all that TA magic to find out if the ratio is satisfactory for us to enter a trade. To control how much we lose when we are wrong, we need to have a stop loss or trailing stop loss in place.  Read: Lessons on Stop Loss