T2W Bot
Staff member
Many beginning and intermediate level traders may benefit from learning a new approach to risk management which I intend to discuss in this article. There are two types of trader that this may apply to and the first, (Trader A), is the one who enters a trade with a stop set at a fixed distance away from their entry and it is always the same distance regardless of the market or instrument being traded. Trader A places a stop entirely based on a fixed monetary risk and when the amount of money that they have set aside for the trade has departed their account they close the trade.The second trader, (Trader B), places a stop that can vary in distance from their entry and is based on “Technical” reasons as to why the trade is no longer valid. In both cases the traders use a fixed amount of money per pip or per point of price movement and can be anything from 50p to £100 or more depending on their account size.
This simplistic approach has problems in both cases. For Trader A there is no...
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