Decoding Risk Management: Your Guide to a Smarter Approach

Use these three strategies to master risk management! ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌  ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ Good Morning! Risk management is a critical aspect of trading that often gets overlooked… Traders like to jump into trades and assume that the stock will go in their direction. Then when the stock goes against them, they freeze up and just hold and hope it goes back up. They become bagholders — sometimes for years because they can’t accept the loss. But losses are part of trading. And as a trader with a small account — you can’t afford to ignore having a proper risk level and a dollar loss that you can stomach. So today I’m giving you three tips to help you set the right risk so you can mitigate losses and stay in the trading game. Let’s dive in… Want my trading plans every day, including an entry, stop, and goal? See how I pick my number one watch daily and how you can [get it delivered to your inbox!]( Sponsored It Took 2,000 Data Scientists to Make This Trading Breakthrough It took more than 2,000 data scientists at JP Morgan to make [this trading breakthrough.]( But what’s even funnier is that our team just made the same trading breakthrough… But thank god we did! Because this thing gives anyone who uses it an unfair advantage in the stock market. And if we hadn’t figured it out… There’s no telling how far ahead Wall Street would be. [>> Discover Wall Street’s secret new toy here. <<]( 3 Steps To Smarter Risk Management [Understanding and managing risk]( is an absolute game-changer for traders. After all, you’re going to have losses, so you need to know how to control them. When we talk about risk, it's all about having a game plan. This plan begins with understanding the chart. [The Chart: Your Blueprint for Success]( I can't stress this enough – have a well-thought-out plan that includes your risk, goal, and entry — all tied to [key levels]( on the chart. One common mistake I see is traders [setting stops too tight]( on volatile stocks. It might sound simple, but it can trip people up. Recognize that different stocks have different ranges. It's crucial to tailor your approach based on the unique characteristics of the stock you're trading. A stock with a lot of range will require a wider stop to [avoid getting chopped out]( before it potentially goes higher. You can have tighter stops in stocks that don’t move much. But when you set your stop and risk level on the chart, you also have to consider the hidden player in risk management… [[ratio]  ]( Position Size: The Hidden Player The number of shares you trade matters — it's not a one-size-fits-all scenario. You can’t trade every stock with the same position size... If you buy 100 shares every time you trade, that’s fine if you have 20 cents of risk. But what happens when you trade a volatile stock and your risk level on the chart is $1 away? Now you’re risking $100. That’s probably too big of a loss if you’re used to only losing $20 per trade. [That’s where position size comes into play](. If your risk level is wider, your position size should be smaller. Even with a [small account]( the right position size can turn a $2 or $3 move in your direction into a solid day. Use position size calculators to help you figure out the right size for your trade. But remember, it's not just about the numbers — it's also about understanding [the psychology behind your trades](. That’s where having a maximum dollar loss comes in… Dollar Loss: Finding Your Sweet Spot Calculating your max risk involves determining the dollar amount you're willing to risk on a trade. This is a personal question. For example, if you have a $50,000 account, losing $500 on a trade isn't crippling. However, the key is to find a number that won't mess with your head. If a $500 loss still pisses you off and throws you off your trading game for the next day or week — it’s probably too big of a number. Ask yourself what’s the maximum dollar amount you can afford to lose based on your account. But also consider which number you accept so that when it comes time to cut a loss, you have no problems executing and moving on. Understanding risk involves having a solid plan anchored to the chart, adjusting your approach based on the stock's range, carefully selecting your position size, and setting a maximum risk that aligns with your account size and psychology. [Get my help picking the right stocks and making a trading plan here](. Have a great day everyone. See you back here tomorrow. Tim Bohen Lead Trainer, StocksToTrade   Sponsored   This “Loophole” is So Powerful There’s a renegade day trader who discovered a powerful “weekend loophole” in the stock market. It allows him to place trades on Friday afternoon… And open up his laptop on Monday to potential green. He’s used this “loophole” to make $8,780, $9,177, and even $69,962 all over the weekend. And he claims with the right amount of hard work and dedication, ANYONE can learn how to use it too… [Click here to discover how he does it](   Sponsored ACCESS NOW: Click to activate these complimentary membership gifts and receive daily market intel. [To The Moon Report Weekly Stock & Crypto Watchlist](   Recommended Membership Gifts     [Facebook]( [Twitter]( [Instagram]( [YouTube]( [Spotify]( [Click Here to Unsubscribe]( (As an Amazon Associate, we earn from qualifying purchases.) 13809 Research Boulevard, Suite 500, Austin, TX 78750 **Tim Bohen teaches skills others have used to make money. Any results displayed are extraordinary and are not typical and will vary from person to person. For more info read our [Earning Claims Disclosure]( About: Making money trading stocks takes time, dedication, and hard work. My goal is to teach you how I have succeeded in the market, but you may not achieve my results. Remember, there are risks involved with investing, including the potential loss of money. We are strongly committed to protecting your privacy and providing a safe & high-quality online experience for all of our visitors. We understand that you care about how the information you provide to us is used and shared. 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