Best Practice Stop Loss Strategies | Part 2: Managing Trade Risk

Stop losses are all about the management of risk in your trading account. But the configuration of this damage limitation mechanism is a 2-stage process. You first need to carefully define the level of the stop loss (covered in the previous episode) and then the position size of the associated trade (this episode).

Perform these calculations in the reverse order and you not only lose the full benefit of a stop loss, but you will also severely impact the long-term performance of your trading strategy. Getting this right could be the difference between and successful stop-loss strategy and a poor one.

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Video Contents:
00:00 Managing risk with stop losses
00:43 Why Darwinex?
01:38 Position sizing with a stop loss
03:47 Risk management with position sizing
05:27 The risk calculation
09:20 Next episodes - stop losses for different trading strategy types

Content Disclaimer: Past performance is not a reliable indicator of future results. The contents of this video (and all other videos by the presenter) are for educational purposes only and are not to be construed as financial and/or investment advice.

[comptegoogle]

I'm beginning to use the volume profile bumps and valeys for my stop loss. The trade is put in the trending direction given by the moving average when there's a clear staking of positions at a price level and the stop loss is behind that stack because that's where the price take of fast in the opposite direction.

[Jay-lcpp]

Amazing content as always, thank you Martyn!

[jocollo]

Thanks Martyn. Looking forward for next video with the examples. 🤗 Are you planning to teach us on how to program the position size calculation for our strategies designing? It would be very welcome. 😉 Thanks