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Good resources on Risk Management

  • #1
  • First Post: Apr 20, 2011 5:00pm Apr 20, 2011 5:00pm
Can anyone recommend any good books, DVD, etc educational resources on risk management?
  • #2
  • Apr 22, 2011 5:17pm Apr 22, 2011 5:17pm
funny how the most important aspect of trading is often the most neglected. no one is interested in risk management
  • #3
  • Apr 22, 2011 5:32pm Apr 22, 2011 5:32pm
http://www.traderkingdom.com/experts/86-john-joseph
The breaking of a wave cannot explain the whole sea.
  • #4
  • Apr 22, 2011 6:06pm Apr 22, 2011 6:06pm
Quoting Craig
http://www.traderkingdom.com/experts/86-john-joseph

Looks like it's worth a good look!
Do your time and enjoy the ride...
  • #5
  • Apr 22, 2011 6:26pm Apr 22, 2011 6:26pm
most risk management the commercial services or even traders use

are all B/S grounded in assumptions, gambling, and exposing capital to RISK.

most will tell you and mark my words:

use stop losses ( stop losses are b/s, thats the best way to blow an account)
use risk reward ratio ( its impossible to actually calculate risk reward, we would have to know market movement to do so, never the less people would try)

my best advice to you is.

know the market
analyse areas of desired entries
identify trend
and scale in by price rhythm, scale out when conditions change
and have a plan to troubleshoot bad entries

stop losses should be avoided, if you feel compelled to have one is because you are not watching the market

read post in this forum
FTI
crusial point
jacko
james 16

are traders than changed my way of looking at this business
AVT INVENIAM VIAM AVT FACIAM
  • #6
  • Apr 22, 2011 7:42pm Apr 22, 2011 7:42pm
It's off the beaten path, but you can find a lot of info on money management in poker forums. It's use is a little different but most of it is the same and it's easy to find. Same with psychology.

Finding good, reliable info on Forex can be a real pain in the ass in beginning.
  • #7
  • Apr 22, 2011 7:57pm Apr 22, 2011 7:57pm
Quoting the redlion
most risk management the commercial services or even traders use

are all B/S grounded in assumptions, gambling, and exposing capital to RISK.

most will tell you and mark my words:

use stop losses ( stop losses are b/s, thats the best way to blow an account)
use risk reward ratio ( its impossible to actually calculate risk reward, we would have to know market movement to do so, never the less people would try)

my best advice to you is.

know the market
analyse areas of desired entries
identify trend
and scale in by price rhythm, scale out...
Can't speak for the others but FTI was like a tier one market maker I heard for years? (Is that right?) These traders are operating from different advanced professional levels so I disagree about avoiding stop losses as a blanket technique for everybody. IMO it's a technique as there are many ways to trade. imo Only experience and testing will determine which one will work for which trader.

My biggest losses occurred when I kept trading after my primary stop loss was hit. It's simply a line in the sand that says, "I'm wrong, and I will not trade for a period until I understand more about what is going on here."

Eventually the bias (on the loss) was proven correct in the above example, but the market had other ideas in the short run. The only thing that would have made a difference to my account that day would have been alot more experience, and to have adhered to the simple limit of the stop. There is no getting around the experience and testing aspect of it though imo.

As far as watching the market you can have a pulse on everything an still be wrong in the short term or get clipped right when you doze off. "The markets can stay irrational longer than you can stay solvent."
Do your time and enjoy the ride...
  • #8
  • Apr 22, 2011 8:46pm Apr 22, 2011 8:46pm
yeah he dealt different, desk and was in charge of large books. he was a tier one market maker, he worked with w wilders if im not mistaken.

he was in the business for 26 years or so. i believe he worked for a central bank but im not so sure.

his methodology is incredible, practicing it gives you a whole different level.
to add to the bottom line every day, and be able to feel the pulse of the market move with it, and trouble shoot bad entries, in essence winning the battle before fighting it. makes this a whole lot more skill and less chance.

everyday my account grows, i go in with confidence that i wont lose the trade, because i fight for it tooth and nail.
AVT INVENIAM VIAM AVT FACIAM
  • #9
  • Nov 25, 2020 6:47am Nov 25, 2020 6:47am
If you want to become successful in the forex market, you need to make a good plan to manage the risks properly.
  • #10
  • Nov 25, 2020 9:11am Nov 25, 2020 9:11am
What risk management techniques and approaches would you recommend?
  • #11
  • Nov 26, 2020 11:43am Nov 26, 2020 11:43am
Quoting Trankuility
It's off the beaten path, but you can find a lot of info on money management in poker forums. It's use is a little different but most of it is the same and it's easy to find. Same with psychology. Finding good, reliable info on Forex can be a real pain in the ass in beginning.

Learn as much as possible from any source you find. You will learn many new things every day.
  • #12
  • Nov 27, 2020 3:26am Nov 27, 2020 3:26am
If you want to become successful in the forex market, yo have to make a good plan to manage te risks perfectly.
  • #13
  • Nov 27, 2020 10:42pm Nov 27, 2020 10:42pm
It is possible to earn a trading profit if you have good research and trading knowledge. Money management is an important part of trading. It is not possible to proceed in trading without that part.
  • #14
  • Nov 28, 2020 6:53am Nov 28, 2020 6:53am
Quoting SamGoi
It is possible to earn a trading profit if you have good research and trading knowledge. Money management is an important part of trading. It is not possible to proceed in trading without that part.
That’s true. Both risk and money management are also important in success of trading.
  • #15
  • Nov 28, 2020 8:45am Nov 28, 2020 8:45am
Very much so. Without them one may as well be gambling instead of trading.
  • #16
  • Jan 17, 2021 4:58am Jan 17, 2021 4:58am
Quoting mlawson71
Very much so. Without them one may as well be gambling instead of trading.
One important difference between trading and going to the casino is that when you go out to gamble, you have a negative expected return. In other words, the house is always expected to win over the long run, on average. Trading , however, if done skillfully and artfully, can put you in the position of the house.
  • #17
  • Jan 18, 2021 1:45am Jan 18, 2021 1:45am
Quoting HisaoFujioka
{quote} One important difference between trading and going to the casino is that when you go out to gamble, you have a negative expected return. In other words, the house is always expected to win over the long run, on average. Trading , however, if done skillfully and artfully, can put you in the position of the house.
In trading the odds are against you as well due to spreads and other transaction costs. What distinguishes trading from casino betting is that you can influence on the winning odds by developing a trading system which has an edge - i.e. has predictive power at least sometimes to change expected value in your favour. It's not possible to do that in casino since you have no control over actions of the dealer.
  • #18
  • Jan 18, 2021 2:04pm Jan 18, 2021 2:04pm
If you want to build up a good and profitable career in the forex market, you need to have the mental strength to handle all the difficult situations.
  • #19
  • Jan 18, 2021 8:10pm Jan 18, 2021 8:10pm
Acquiring trading knowledge requires a lot of research. If the research is not completed properly, it is not possible to acquire trading knowledge.
  • #20
  • Last Post: Jan 24, 2021 1:52pm Jan 24, 2021 1:52pm
It is very important to follow the trend. Failure to follow the trend can lead to a loss. When I open a trade, the trade makes a profit of 20 pips and brings the stop loss to the entry point. If the price is ever volatile, I will not have any loss. Another thing is that when I see the market volatile, I close my trade.
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