My Trade with Murray

23 Agustus, 2008

The Truth About Trading Risk

Everyone who trades is always looking for the perfect signal. This is often referred to as the “Search for the Holy Grail”. It might as well be the Hunt for Red October. There simply is no perfect signal. You need to be able function in an environment of unknowns and probabilities. Your edge has to be patience and discipline.

Here are some of the hard earned tips we have for you on controlling risk in trading:
- Calculate Risk: and risk a maximum of only 2-5% of equity per trade
- Preserve your capital at all costs
- Stops are “NOT” money management
- Position sizing is the key to wealth
- Your biggest draw down has not yet occurred!
- Never, Never add to a losing trade!
- If you make a mistake, exit immediately
- Increase trade size on winners
- Decrease trade size on losers
- Leverage works both ways, and while rewards are great, the risk is extremely high
- With indexes and FOREX your leverage is as high as 200%
- Disaster Stops must always be set in case of exceptional world events
(www.futurestradingsecrets.com)