TheRiskBlog

Volatility can be really bad for your long time performance. Before you can think, the market hits your stop only to bounce back a few minutes later.
The flash crash on May 6th was an awful example for this.
If your stop is close, you will surely get kicked out in one volatile move. But if you enlarge your stop too much, you hurt your Riskmanagement. A loss that’s too high for your account.
But how can our positions survive a volatile phase?

Today I want to show you how I create overnight positions in trending stocks. Like in every investment you first have to choose an initial risk stop that doesn’t threaten your account, but unlike intraday trades it is important for overnight positions to stretch the trading range.

Today we start a series about risk management procedures for the active trader. We will work our way through a normal trading day and for the first step in our series we look at position size and how to come up with the correct one.

Very often traders look at a chart, find a pattern that they like and put in all they have. This is fine if the stock does what it is supposed to do but

Up to now it was a tedious process that required skills and knowledge. Well, the bad news is, it still does, but the task got easier.

The Moneymanagement process is one the two main topics we deal with on this website. If you want to have success trading or investing there is just no way around the money management process. You need to do it and you need to know what you are doing. Since it is not always easy to make the right decisions involving your own money here is a primer on how to start your own money management process.