Want to master risk management in trading like the pros? Look no further!
Discover 5 invaluable risk management lessons from the legendary trader, Richard Dennis:
1/ Know Your Risk-Reward Ratio.
Ensure potential gains outweighs potential losses.
- Aim for a minimum 1:2 ratio
- Analyze potential outcomes before trading
- Adjust strategies accordingly
2/ Position Sizing.
Know how much to trade.
- Never risk too much on one trade
- Adjust position size based on volatility
- Keep potential losses manageable
3/ Set a Loss Budget.
Know your limits.
- Define a maximum loss for a period
- Stop trading if that limit is hit
- Protect your capital for the long run
4/ Diversify.
Spread risk across markets.
- Don’t over-concentrate in one asset
- Explore various markets and instruments
- Reduce the impact of any single loss
5/ Limit Leverage.
Borrowed money magnifies losses.
- Understand the implications of leverage
- Use it wisely, if at all
- Always be aware of total exposure
To learn more about How you can Start Trading for a living, sign up below for my Free Training on the “7-Steps to Financial Freedom through Trading”.
