TIP: How to control losses and protect profits
|While it's important to see stops as a measure of risk control, it's different than controlling the risk by sizing the position or even managing an open position. Many people believe that knowing where to place protective stops constitutes money management, perhaps because of lack of information or unwillingness to delve into issues related to managing risk.
Although stops are an indispensable tool to protect our capital, the placement of stops is just a part of risk management. If a trader applies, for example, a stop loss of 200 pips on each of his positions he is pursuing a strategy that is absolutely not related to his total available capital or equity: you can not categorize that measure as money management. Read More
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REPORT: Money Management Models - Learning Center
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