So volatility was away on vacation for a few months and decided to come back enhanced…
Market is awaiting news with Trump/China/Tariffs.
Don’t under estimate the power of volatility and the quick punishment it can cause….
Think trade size, risk management – Have the larger picture in mind of what you are trying to do….
Here is a good article I wrote on the topic a while back and is still very valid:
It is a four letter word. As traders it is something that we thrive on and dread.
We chase and fear. We look for and look to avoid. It is RISK. Without it, there is no opportunity for profit. Without it trading lacks potential. With it, failure and heartache are the consequences when it is abused.
Risk itself is not a bad thing. When it is misused by traders, it becomes a problem. Controlled risk presents traders with exciting and profitable opportunities. Uncontrolled, it brings the end to the dreams and careers of many traders.
How should we as traders confront risk? The first step is to respect it.
Realize the damage it can do to our account equities when it is abused. The two most important tools that we have to control risk are stops and position size. Read More…..
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