Interview by Stuart Mcphee and Ray Barros on financial risk management.
Stuart: Early I know that it was almost necessary to recognize and appreciate the importance of risk management. Was this position the size of where you stopped your stops or the above?
Ray: Initially, I could not finish the stops, then read every book to stop stops, but then I did not handle the risk of the portfolio. You are spread over several devices and even if you lose 2% per meter, you open up to 20 devices. You know, suddenly there are 20% of them open. You have to risk trading, how many contracts you have to take, so that all these things have to be learned hard.
Stuart: I'm sorry to hear that. Many people make a lot of mistakes early and this is only done by making the mistakes. I mean, I can read twenty books that say they know the size of the position and they do it and they do it. You go through and make all the mistakes and hurt you and tell you when your wife has financed you early, he probably did not lie well with you, so he's forced it. Ray: Yeah, and I think you know that I've told you a few times that I have an excuse to say that in my day no one was there who would really help. I mean, the things that were there were nothing like the help you can get today. I mean, there are some really good people there who want to help.
Stuart: All right, so there's a really big difference. About financial risk management, and you know how important it is, and I hope others will recognize the importance of risk management. But we get a lot of questions from customers, all of them are about joining and doing the seminar, and someone will talk about risk management and you may have a good audience, but someone else talks about the post and the room is in a standing room. Because this is the key to success. What are your thoughts about entering and why people concentrate so much and give people guidance, methodology, and settings. Ray: I think they have a place. I think its trading rules are probably the least important. In my opinion, it is more important to see which trends are going to be traded and that this trade is being created. The post almost always follows these things.
Second, I do not remember when I bought the lower one. I do not think I've ever done this, after entering the market, it would be a bit of a heat. So you need to know how much heat is normal with your methodology. John Sweeney has written a book about the maximum negative trip and the maximum of your favorite excursion. This is what I recommend to all those who talk about trading and talk about input because this approach statistically shows how much heat they have bought to be able to receive the system and still generate profits.
If you know this, it keeps the pressure away from it. I have to buy the exact low I want to buy within two ticks, or I sell it under two ticks, and often some systems are just not intended for that purpose. Therefore, a newcomer should soon be in compliance with both entry and financial risk management rules.
Source by sbobet