risk management for day trading

Discussion in 'Risk Management' started by Gladiator4444, Aug 6, 2003.

  1. IN2WIN

    IN2WIN

    I am wondering if (1) you have a strictly defined profitable system that you tested first in both back testing and live paper trading before you began trading money.

    If you do have one, and it worked well over a period of 2 ot 3 years, with at least 6 months of that being live paper; then the only question left is: (2) "Are you adhering strictly to you method?"

    If the answer to both of the above is not an emphatic YES, then stop trading money until you can answer yes to both

    Best of luck
     
    #71     Dec 13, 2003
  2. Yannis

    Yannis

    IN2WIN,

    Very good summary of an approach that a new trader should follow. I would add something about using a good simulator instead of just papertrading (but maybe you are including the tool in your general term "paper.") In this way, you can also see realistic fills, appreciate the maginitude of slippage that your method entails, and get a better feel for some of the emotional aspects of trading.
     
    #72     Dec 13, 2003