Marvel Superheroes
Who are the bad guys?
Some bad guys are the Red Skull, Electro, and Magneto.
With answers to these questions, you can begin to quantify your risk management parameters, taking a mathematical approach to assessing whether a particular trade is too risky for you. Consider how much leverage you’ll use, your maximum trade loss and your maximum day loss. For example, your risk vs. equity matrix on a per trade basis might look like this:
- What proportion of my account am I prepared to risk on each trade?
- How many positions am I prepared to run at any one time?
- What is the maximum account exposure I am prepared to accept?
Test your knowledge
Who are the bad guys?
Some bad guys are the Red Skull, Electro, and Magneto.
With answers to these questions, you can begin to quantify your risk management parameters, taking a mathematical approach to assessing whether a particular trade is too risky for you. Consider how much leverage you’ll use, your maximum trade loss and your maximum day loss. For example, your risk vs. equity matrix on a per trade basis might look like this:
- What proportion of my account am I prepared to risk on each trade?
- How many positions am I prepared to run at any one time?
- What is the maximum account exposure I am prepared to accept?