11 risk management rules for the trader

Risk control is an essential part of successful trading. Effective risk management requires more than careful monitoring of the size of the risk, but also a strategy to minimize losses. Understanding, how to control the amount of risk allows a trader, beginner or experienced, continue trading even then, when unexpected losses occur. One of the authors of articles for Stocks & Commodities offers guidance on risk control. Since every trade is subject to a certain degree of risk, applying some general principles of risk management will reduce potential loss. Some generally accepted axioms of risk control are listed below and can be applied by all., who when – either traded or is thinking about it. The rule 1: Do preliminary homework. Do your homework before the deal – it's a duty, which cannot be replaced by anything. There is a well-informed seller for every buyer, and there is a well-informed buyer for every seller. Everyone tries to maximize their profits.

Super Traders (Introduction)

Day trading with shares on the US stock market appeared relatively recently., somewhere in the mid 90s. Once the development of technology made it possible to install remote trading terminals, the first companies began to appear, offering their clients to try themselves on this, historically dotted with roses and thorns, cornfield. This was done in various forms., Certainly, not free at all. Some broker dealers, for example, offered remote access with account opening. Mostly, clients were provided with trading platforms, not for traders, and for investors for long and medium term. On the subject of opening and closing positions platforms worked slowly, but for investment speed and did not require. Opened an account, transferred money, – and forward. In this form, many companies operate to this day., and many of them are thriving.. There were other firms, offering more professional conditions directly in their trading floors. The situation in them was somewhat reminiscent of a casino.. The client comes, gives cash or personal check. Here's a computer for you – Come on! Lost money – let's have more. Not, – Come, when will. Nobody really taught clients anything. What for? Actually, такие полу-тотализаторы действовали в США ещё с незапамятных времен. Without computers of course. Calculation there, certainly, was not for professionals, but out of them came such, in the future serious people, как Ларри Ливингстон, звездный игрок Уолл-Стрит на понижение начала …

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Zurich axioms

Max Gunther formulated the basic principles of trading, called the Zurich axioms: About risk: Anxiety – it's not a disease, but a sign of health – if you are not worried, you are not risking anything significant. Always play meaningful bets – if the quantity is so small, that his loss will not be of any significant significance, that is, probably, also will not bring any tangible profit. Resist the temptation to diversify. About greed: Always take your profits quickly enough. Decide in advance, what benefit do you want to get from the deal, and when you get this, Go out. About hope:

Trading rules from Jack Schwager

Jack Schwager is the author of the well-known Western bestsellers "Market Wizards" and "New Market Wizards", in which he summarized the experience of the best traders and the most successful investors. Schwager's first book, published in Russian, became an 800-page tome "Technical Analysis. Full course ", published last year by the publishing house "Alpina Publisher". In his book, Schwager also included the quintessence of market wisdom - tips for traders. With the kind permission of Alpina Publisher, we publish the tips in a slightly abbreviated magazine version. Start trading 1. Differentiate between important long-term position trades and short-term trades. Average risk for short-term transactions (implied by the number of contracts in the position and the exit point) should be much less. Besides, the speculator should focus on trading long-term positions, as they are usually significantly more important to the success of the trade. Error, performed by many traders, is, that they are so immersed in trying to catch short-term market swings (creating tons of commissions and slippage), what major price movements are missing.

The market starts to come alive

Today was a good day to make money in the market. There were a lot of good promotions and opportunities. OPG : I bought a finance basketball at the opening, but they collapsed, although the market opened positive. A little lost. Intraday : VFC : V.F. Corporation Sector: Consumer Cyclical > Industry: Apparel / Accessories An absolutely stupid idea came up, short VFC by highs, in a growing market, the caught moose proved the absurdity of my idea. VAT : Autoliv Inc.

Golden words about the exchange

According to Buffett, long-term investors are needed for the overall health of financial markets, looking for long-term prospects and making appropriate investments. “The Warren Buffett Way”, Robert G. Hagstrom Jr.All professional players (alone – before, other – later, and still others – regularly) are experiencing total bankruptcy. The reason is – their ability to voluntarily put every last penny on the line, even if the odds of winning are dubious. “Stock speculator universities”, Viktor Niederhoffer The game of professional investing is unbearably boring and overly demanding for everyone, who is completely devoid of player instinct. Same, who is endowed with this instinct, forced to pay the appropriate price for their addiction. “Exchange – game for money”, Adam Smith

Warren Buffett's aphorisms

I always knew, that I will be rich, did not doubt it for a minute. Rule one: never lose money. Second rule: never forget rule one. Buy only that, what will you be glad to have, if the market closes for ten years. Never invest in a business, in which you don't understand anything. There are many different things, which I do not understand. But this is not a reason, to stay up at night. It just means, that the next day I will try myself in another business. This is what, what every investor should follow.

Fool's Day

OPG : The market opened in the red and decided to sell RITZ on OPG. They didn't really go, but I cut a little money. Intraday : Thought the market 5 the day will stand and therefore decided to watch on the sidelines, in the end did not trade anything. MOC : Everything was like yesterday, left buy , but everything started to fail. Sold Ritz and Finance, in front of the only pharmacy, on which I closed the minus basketball, after which everything went down, classic :) Results: Day finished flat, could make money. My discipline and concentration on trading began to limp. You need to pull yourself together and strictly follow your rules., very

SEC throws a stone at the Bears | uptick rule

Today, the old uptick rule is being introduced., I didn’t find him and therefore I don’t know for sure how to trade with him now. I almost always use short markets, and now they will turn into limit owners, I feel it will be fun, especially on MOS.

Dictionary of trader and investor. 100+ terms

The Trader's Financial Dictionary contains basic exchange terms for beginners. Most relevant financial “slang”. Market On Close (MOC) order is an order, which can be sent during the day during the trading session, but will be executed in the last trade at close. Throughout the trading day, exchanges accumulate MOC orders and bring them together in the last trade (print) trading day. After-hours trading – execution of transactions with securities after the close of the exchange session. Previously, this type of trade using special computer systems was used by, mainly, institutional traders. Many online brokers today offer access to “last day trading” a wide range of investors. Ask (asked price) – Selling price – seller's asking price, ie. the lowest price, by which he is ready to sell. At-the-opening order – order to the broker to conclude a deal at the best price at the opening of the exchange (at the beginning of the morning session). ATS (Alternative Trading Systems) – alternative trading systems are the fastest growing e-commerce medium. They provide their members-subscribers with access to information and trading on various platforms through special software.. Compared to online brokers, PBX operation is faster and more reliable in that, regarding the processing and execution of orders. In the SEC rules, the term ATS is defined as “any organization, association, face, group of persons or system, That: …

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