The Twin Pillars of Risk Management
Learn how to properly manage your risk, using position sizing and stops to maximize your profits.
One of the biggest missing pieces of most traders' trading plan is Risk Management. This course is designed as an in-depth study on how to leverage the two biggest tools: Stops and Position Sizing.
Most traders learn the hard way that risk management is the difference between staying in the game and blowing up your account. Dan walks you through his complete framework for managing risk on every single trade.
The Twin Pillars of Risk Management
Online Digital Video Course | Running Time: 1hr, 3mins
Course is digitally delivered
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Retail Price:
$297
The First Pillar: Position Sizing
Position Size is the amount of money that you're willing to commit to a trade. It's also one of the most important parts of a trade, and something that most traders lack a proper strategy for.
Making your position too small can make a successful trade virtually worthless, as the return is too small and won't impact your account balance. A position that's too large puts you at great risk and makes a losing trade hurt more than it has to.
When it comes to position sizing, we're going for the Goldilocks zone. Splitting the difference gives you the best of both worlds: Great profit potential and only modest risk. This course will give you the tools and strategies you need to make the proper decisions on the size of your positions.
The Second Pillar: Stops
When setting stops, there's 3 potential pitfalls:
- Not setting a stop. Without setting a stop, your risk is literally 100%. It is the equivalent of walking into battle with no armor, no weapons, no support.
- Tight stops. If the stop is too tight, the likelihood of being stopped on a normal gyration in price is high. How frustrating is it to get stopped out on a normal pullback, only to then see the stock rocket higher without you?
- Loose stops. If the stop is too loose, your risk is too high. How many times have you sold a plunging stock in a panic, only to realize that you sold at the low after an extreme pullback?
We're seeking a stop level that protects you from losses, while being able to handle the normal changes in the stock market. The good news is: there's a right way to determine the proper stop range and the proper position size, to help you maximize your profits, while reducing your risk.
We're going to cover it all in The Twin Pillars of Risk Management.
What Traders Are Saying
"It gave me a complete logical picture of the entire issue of entries and risk management using stops. I've been a member for a long time but this really pulled everything together for me."
"I feel like this was the missing piece to my trading. I wish I knew this a couple years ago. I really feel more in control of my account and I KNOW why I'm getting in now and most importantly how to get out without any emotion."
"Thinking of trades in terms of risk % of the total portfolio is a game changer for me and I particularly liked the spreadsheet to help explain the concept."
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