My Risk Management

Risk Management is the third most important element of trading in my opinion (the initial two are Psychological State and Strategy/Analysis Application).

I wanted to provide some information about how I discipline myself and impose Risk Management into my trading. Before I do that, I want to make it clear that every trader is different; every trader has different goals, targets and monetary requirements. This may not be suitable for your style and you may want to adapt the approach that I use – that’s perfectly fine.

In any case, let’s start with percentage risk per trade that I take and strictly stick by:

  • INTRADAY TRADES: 0.5% per trade maximum (50 tick stop loss maximum)
  • END OF DAY/ SWING TRADES: 1.5% per trade maximum (150 tick stop loss maximum)

Aside from the above, I also have a few other rules that I impose on my trading and attempt to get across to my Clients. They are:

  1. You only have x3 attempts to take Intraday positions. If you lose all three – that’s it. You close down the platform and move on to the next day.
  2. If you incorrectly judge the price momentum during the London session, you only have one more chance to take a trade during the London session. After that, you must wait until the US session money flow to have your second or third attempt.
  3. If you don’t know why the price is moving in the direction that you’re looking to trade, you should not be trading that pair.
  4. I only focus on a few pairs – EURUSD/GBPUSD/AUDUSD/USDJPY. Less is more in trading, I am accustomed and comfortable with the assets I follow and the spreads are cheap enough so that the costs don’t interfere with my results.
  5. I never trade ahead of a key fundamental release. I will only trade out of releases – not into them.

Hopefully this gives you an outline of how I manage my risk and approach to the markets. If you have any questions, use the form below and I’ll get back to you personally.

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Risk Warning.