In previous article series “Riding the Price action” I stressed that having right technical levels is not enough in order to successfully trade them. Risk-to-reward conditionality, dynamics of liquidity and money management comes to play. Risk and money management might sound boring and well over-escalated topic, but personally I found popular material about this topic all blurry, stereotypic and too formal.
Popularly accepted common approaches of sizing in/out of the total exposure in combination with entry and exit displacement, as risk and money management during the trade are left completely to subjectivity of a person’s choice to pick exact entry and exit points. And most importantly – additional entries after price travels notable distances after rejection/impulse point, generally are high risk in any context.
Actually one can google out more information about money/risk management in gambling context than in trading. If gamblers manage their way out with unfavorable odds, then with a proper technical analysis, trader should have some use out of these principles. Personally I use somewhat similar approach to D'Alembert’s betting system.
Let’s forget all the text-book risk man…
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