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Re: Risk of Ruin



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As an example.  If my trading account equaled $1,000, I would only risk $10 per
trade.  Each trade would vary in size but I would place a stop loss risking only $10. 
Trade size would depend on the chart pattern, but for any trade the anticipated gain
would have to equal at least $30.  The closer the stop to the initial entry point, the
larger the trade size allowed.

Dan Cash wrote:

> Chris Hengeveld wrote:
>
> > I've found that I'm comfortable risking about 1% of my portfolio per stock
> > trade.  Typical trades average anywhere from 8-12% of my portfolio size.  I then
> > only trade stocks with a 3-1 profit/loss ratio based on chart patterns.  Since I
>
> Please forgive my lack of understanding.  What do you mean by the above, last
> complete sentence?  Could you give an example?
>
> >
> > don't trade a system per say, not a mechanical approach, I've found staying true
> > to my money management approach will help minimize downside risk.  It's not your
> > entry where you make or loose money, it's your exit.
>
> I agree.
>
> Thanks, Dan
>
> >
> >
> > SGT099@xxxxxxx wrote:
> >
> > > List
> > >
> > > Doesn't it make more sense to customize how much your willing to lose based
> > > on what you see on the charts be it a recent low or an indicator turning
> > > rather then saying i can loose x amount of dollars before ill get out. seems
> > > more like casino gambling.  especially when using a percentage I found that
> > > the more money i make the more money i loose down the line and simply wind up
> > > where i started from
> > >
> > > Stan