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5 articles
Clear filtersPosition Sizing
How much to trade is a separate decision from what to trade, and it is the one that determines whether a losing run is survivable.
Stop Losses: Types and Placement
A stop is a decision made in advance about when a position is wrong. Where it sits should follow from the structure of the chart rather than from a preferred dollar amount.
Risk and Reward
The distance to a target divided by the distance to a stop. Useful for comparing opportunities, and meaningless without a realistic probability attached.
Drawdown and the Arithmetic of Recovery
Losses and the gains needed to recover them are not symmetric, and the asymmetry gets rapidly worse. This single table is the argument for every risk control there is.
Writing the Plan Down
A plan that exists only in your head changes to accommodate whatever you want to do. Writing it down is what makes it a constraint rather than a preference.