The Risk Manager

The job of a trader is never about profits. It is about risk. The real job of a trader is to find the right risk to assume. What is the right risk? The right risk is one that offers you, on average, a net positive return. The right risk is the one that you can afford to lose. The right risk is the one you take for a reason, not out of your emotional whims. Taking the right risk is difficult. This is because even the right risks cause losses in the short run. It is tough to recognize something as “right” when you lose money because of it. But if you want any chance of making it in trading, you must learn to accept losses that stem from taking the right risk.

You need to view losses as costs of doing business. For a profitable trading business, each trade loss is just a business expense like your internet connection fee. You cannot trade without an internet connection. Similarly, you cannot trade without losses. A trader also faces risks beyond the financial market. There are business risks. What happens when your broker goes down? What happens if your computer fails? What happens if you lose your trading records? The best way to deal with risk is to keep things simple. Complicated strategies, systems, and processes multiply risks. Very often, the consistent and profitable trader is the one who has the right attitude towards risk – the trader who see himself as a risk manager wins.

Contents:

• How to Create a Price Action Day Trading Plan
• Why You Must Have An Initial Stop-Loss?
• Five Ways To Exit Your Trade
• The Logical Trader’s Guide To Setting Stop-Losses
• Position Sizing – The Most Important Trading Rule
• Day Trading Setup Evaluation Cycle
• Five Day Trader’s Tricks to Control Your Emotions
• What To Do When Your Day Trading Broker Fails?
• Nine Ways to Simplify Day Trading
• Five Checks Before You Start Day Trading For A Living

The Risk Manager By Galen Woods pdf