Chapter 8 – Risk Control
The traders who win are those who minimise risk. This is another key chapter and its importance is such that readers should read it carefully and ensure they understand its contents. Those who do not minimise risk inevitably pay the price and get wiped out.
It is for this reason that you often see strong moves after a news item is out of the way, often a news item suggesting a strong move in the opposite direction. The big traders, who got that way by minimising risk in the first place, wait until the risk is at its lowest, when the news is out of the way.
Risk control includes the following:
1. Not trading in too big a size, thus reducing the risk of a wipe out. Actually you should eliminate the risk of a wipe out . ...