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
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
To buy click on cover. Click link below for Trading Secrets at The Book Depository Book Depository Link When I had been trading for around 6 months, I was starting to become frustrated because both companies I had purchased trading education from were throwing me fish rather than teaching me to fish for myself. I started my trading doing covered calls which work quite well for producing income every month but they really only work well in a market that is going up in value. I found myself holding shares that had reduced significantly in value that I
Click on cover to buy from Amazon Click below to buy from The Book Depository Book Depository Link Click on cover to buy from Amazon Click below to buy from The Book Depository Book Depository Link These books are highly regarded by any trader who has read them. Jack Schwager interviews a variety of different traders all with different approaches and all of thm very successful – although I believe a few of them may have gone bust after these books were released. It’s great getting insight from people who have waked the talk and made a
This is a great Youtube Video of Mark Douglas, sadly now deceased, discussing Trading Psychology and Risk. Originally posted 2017-05-02 16:46:20.