Psychology & Risk Management For Traders

By | July 21, 2014
  1. I keep Blue Channels turned off while trading.
  2. I do not care about others opinions I care only about price and chart action.
  3. I do not try to predict, instead I trade in accordance with the chart.
  4. I am not trying to prove I am right I am trying to make money.
  5. I am not trading for ego gratification I am trading for money.
  6. I am not trying to be the genius who calls a top I am the trend follower who follows a trend all the way up until it ends.
  7. I admit freely to my losing trades along with my winning trades.
  8. I do not get emotionally attached to each price movement through out the day.
  9. I have faith in my rules, methodology and system.
  10. I understand it that it is the market conditions and not me that creates profits.

RISK MANAGEMENT

  1. IĀ never add to a losing positions.
  2. I carefully control position sizing to limit risk based on volatility.
  3. I attempt to never loseĀ  more than 1% of my capital on any one trade.
  4. I trade smaller when volatility is high.
  5. I have stale stops and sale positions that do not trend in four days after entry.
  6. I quickly sell losing trades when my stop is hit.
  7. I sell stocks when they close in the bottom of the days range.
  8. I never expose more than 6% of my capital to possible loss at any one time.
  9. Risk is priority #1, profits are #2.

3 thoughts on “Psychology & Risk Management For Traders

  1. J. Johnson

    Dear Bramesh,

    Absolute essentials for Risk and Money Management.

    However, I would appreciate if you could kindly clarify point No. 5 under Risk Management
    given here : “I have stale stops and sale positions that do not trend in four days after entry.” Was there a typo….or what does this sentence exactly mean.?

    Thanks and Best Regards

    J. Johnson

  2. Jayshree Kochar

    Hi, what software do you use for charting and getting live prices while trading?

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