Trader tend to believe that they do not need to address money management until they can prove that a particular trading system will work and they can make money using it. This is the most common areas for serious mistakes by traders and it is a costly mistake. As I have always mentioned that a [...]
Posts Tagged ‘manage money’
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Risk of Ruin
Posted by Taro on April 3rd, 2010
The term Risk of Ruin in trading refers to the probability of losing entire trading account because of a string of losses. For example if you are trading a futures contract, when you go long or sell the chances that the prices will move in the same direction as your opened positions is 50 percent. [...]
