Risk Control - Think Beyond The Basics

4 thg 7, 2022

Hi Traders. Let's talk abit about Risk Control/ Risk Management today.

I believe most Traders may be thinking that Risk Management/ Risk Control is about
- Having a pre-determined risk (% Risk-per-Trade)
- Having a Stop Loss

Well, that's correct to a certain extent. But if you really think about Risk Control, do you think its really all about that 1 - 2% risk per trade?

Look, most of us got the meaning wrong. Let me share some examples:

1. You took 3 losses on GBPJPY, all 3 of them are shorts with the same trade setup. Yes, even if you are only risking 1% per trade, but aren't you now risking 3% on the same setup?
2. You took 3 positions (GBPUSD Long, AUDUSD Long, EURUSD Long). All 3 of them are positive correlated, so if one of it goes wrong, it is likely that all of them will be wrong.
3. You took 5 positions at the same time. Why do you have to expose yourself to that amount of risk?

The point I'm trying to tell you is, often we really do not have to put ourselves at that high level of risk to generate a decent return.

The way i do it, is i enjoy taking one trade OR maximum two trades at a time. So instead of having the frustration to worry about all those correlation. I make sure the positions I'm involved are almost non-correlated.

Then if any of my position goes well, I can always scale into it. In that way, I maximize my winner, minimize my loser.


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Take care and trade safe.

All the content I've posted are for educational purposes, please perform your own research and only take it as a reference.