Position Sizing

Van K. Tharp Books

David Trading Resources , , , , , , ,
trading results in great profits if you have a plan

Click the cover to the left for Amazon link Click link below for The Book Depository Book Depository Link     Click the cover to the left for Amazon link Click link below for The Book Depository Book Depository Link     I have a love-hate relationship with this author. His work on risk management, position sizing, setting stops, trading psychology are brilliant. I did however find his book, Trading Beyond the Matrix was weird beyond measure after around the first quarter. It’s like taking the redpill in “The Matrix” on steroids. I don’t normally recommend buying how-to-trade books however
Read more

Risk

David Trading for Beginners , ,
risk of ruin

This is one of the most difficult things in trading. It almost seems counter intuitive. The only way you can ever hope to be a success is to control your risk. If you are reckless and blow up your account you will run slap bang into the one reality – if you have no money you cannot play. The trick in trading is to preserve your capital so you survive long enough and are able to take that trade that will come along and will make all the difference to your account. I’m going to talk about stops in another
Read more

Stops

David Trading for Beginners , , , , ,
babcock & brown chart atr

Let’s talk about stop losses and how to set them. In a previous article I said that the only thing we have any control over in trading is how much money we are prepared to lose. The way we manage this risk is by using a stop loss. The name says it all – its purpose is to stop your losses at a pre-determined point. You may have heard the expression ‘cut your losses short and let your profits run’. A stop loss is the way we cut our losses short. However it is one of the hardest things psychologically
Read more

Position Sizing

David Trading for Beginners, Trading Tools , , , , ,
stop this with good money management

Please also see the discussion on Stops This is one of the areas that almost killed my trading account. In addition to trading without a stop loss, I was trading position sizes that were far too big for my account. This was great if a trade was moving in my direction but if you add in leverage, the losses were magnified as well and I could easily have been wiped out. No one ever told me how to determine how much I should buy – certainly I was never told anything other than this kind of consideration “make sure you
Read more