Thread: Risk control ?
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Old 28-01-2005, 01:50   #4
SimSpeed
Money Management
 
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In my opinion your money management always takes president over the signal system. Yes, you may miss an opportunity here and there. In fact you will miss a lot of profitable opportunities simply because they exceed your current risk profile. Signals will come and go just as the sun shines, the wind blows or the rain falls. But if you're standing there naked because you blew up your account and can't afford to cover your A** then what's the point?

You never know when losses will gang up on you. That next stacked trade that throws your risk out of wack may be wildly profitable or it could be the start of a disastrous run that knocks you out of the game.

But in saying all that.... that's not to say don't take the trade. Risk is what you accept it to be. If your risk tolerance allows substantial drawdowns in return for disproportionate gain then be forewarned and prepared to deal with the downside because it will come in due course. If you don't want to face that kind of music then stick with a low risk profile and forget about missing trades, there's always another one just around the corner.

Be true to your goals and responsible for your actions, because nobody else can.

Trade in your comfort zone and enjoy the fruits of your labor.
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