Open trading account 
We often read on numerous forums about how much a retail trader should risk per trade and the majority of forums advise risk per trade should be between 1 to 3%. However, I think the best way to gauge your risk tolerance is to place a trade overnight with a reasonable amount and see whether you are thinking about the outcome of that particular trade while you are in bed. If you are worried then obviously the amount you risked is above your risk tolerance and it's time to lower your risk until yo…
alifari's Blog
DAY 2 - INTELLIGENT RISK TAKING
We all know the saying, "No risk, no reward." In markets especially, we cannot make money if we're not willing to take risks. However, my experience is that the greatest problem is not with taking risk, but with the intelligence of risk taking. Traders take risks that, ultimately, they are not emotionally prepared to handle.
Risk taking becomes unintelligent when the amount of risk we take is ultimately more than we can handle, either emotionally or business-wise. The trader who routinely gets s…
Risk taking becomes unintelligent when the amount of risk we take is ultimately more than we can handle, either emotionally or business-wise. The trader who routinely gets s…
DAY 4 - RISK TOLERANCE
We often read on numerous forums about how much a retail trader should risk per trade and the majority of forums advise risk per trade should be between 1 to 3%. However, I think the best way to gauge your risk tolerance is to place a trade overnight with a reasonable amount and see whether you are thinking about the outcome of that particular trade while you are in bed. If you are worried then obviously the amount you risked is above your risk tolerance and it's time to lower your risk until yo…
DAY 7 - Risk to Reward Ratio
Why is that many traders will take a trade with a 100 tick target, get 95 ticks up, move to break even and do nothing else because its a free trade.
Yet if you told them to get out and take a new position with a 5 tick target and a 95 tick stop they will say "Are you out of your mind?"
The point is you have to be flexible in your profit expectations and assess your R/R not only at the time of entry, but also when the trade is running.
In my opinion, it's not about how many pips you make or how…
Yet if you told them to get out and take a new position with a 5 tick target and a 95 tick stop they will say "Are you out of your mind?"
The point is you have to be flexible in your profit expectations and assess your R/R not only at the time of entry, but also when the trade is running.
In my opinion, it's not about how many pips you make or how…
DAY 3 - RISK TOLERANCE
We often read on numerous forums about how much a retail trader should risk per trade and the majority of forums advise risk per trade should be between 1 to 3%. However, I think the best way to gauge your risk tolerance is to place a trade overnight with a reasonable amount and see whether you are thinking about the outcome of that particular trade while you are in bed. If you are worried then obviously the amount you risked is above your risk tolerance and it's time to lower your risk until yo…
DAY 10 - RISK MANAGEMENT
Markets are ultimately driven by order flow. Even assuming it's possible to know exactly what orders are currently in place, and at what levels (the 'order book'
, there are always more orders about to be added that traders have no knowledge of. These orders are created by a host of different factors, that are too diverse, complex and abstract (e.g. sentiment) to be calculated precisely.
I recall reading a good anecdote in a Mark Douglas book, that went something like this: A capable analyst wh…
, there are always more orders about to be added that traders have no knowledge of. These orders are created by a host of different factors, that are too diverse, complex and abstract (e.g. sentiment) to be calculated precisely.I recall reading a good anecdote in a Mark Douglas book, that went something like this: A capable analyst wh…
Risk vs Reward
Here is something interesting I read on twitter, the other day:
The point is you have to be flexible in your profit expectations and assess your risk vs reward not only at the time of entry, but also when the trad…
Why is that many traders will take a trade with a 100 tick target, get 95 ticks up, move to breakeven and do nothing else because its a free trade.
Yet if you told them to get out and take a new position with a 5 tick target and a 95 tick stop they will say "Are you out of your mind?"
Yet if you told them to get out and take a new position with a 5 tick target and a 95 tick stop they will say "Are you out of your mind?"
The point is you have to be flexible in your profit expectations and assess your risk vs reward not only at the time of entry, but also when the trad…