How I Manage Risk in Trading

Apurva Sheth
Last time I spoke to you about the backbone of my trading system: risk management. Trading is all about risk management. If you are good at managing your risk, then you will succeed in trading...else you will end up like most others.

Our risk management system is built on two principles.

  1. Risk not more than a fixed amount of capital on any trade.
  2. The amount at risk on any single trade is very small compared to the overall capital.
Last time I shared with you four simple steps to manage risk. The first is to set aside a dedicated amount to trading, ideally not more than 5% of your equity allocation. Second, determine the percentage of risk you will take on each trade, ideally not more than 1% of your capital. Third, determine the absolute value at risk per trade. And forth, decide the number of shares you will buy to control your risk on each trade.

If you missed the article, I strongly recommend you go back and read it now.

Okay, assuming you have read it, I would like to proceed. I know you would have found this risk management strategy useful, but you're probably wondering how to practically go about it. I have good news for you: Today, in this video, I will show you how we here at Swing Trader manage risk through our portfolio tracker tool, which is specially designed for this purpose.

How do you manage your trading risk? Share your views in the Club or share your comments here.

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2 Responses to "How I Manage Risk in Trading"
Beenu Dutta
26 Oct, 2016
Hi Apurva I am new subscriber. I am not understanding how to see recommendations as since beginnig its showing the recommendation of NIIT Tec no new recommendation Secondly please help me to understand other benefits of subscribing part. Is it possible to have direct interaction with you please tell Waiting for Reply Like 
Mohammed sayeed
08 Jun, 2016
Hi, Apurva, i am newly subsribed to This service, as per your instructions i entered all data but it is not showing suggested quantity as it is showing in your video. Kidnly advice. Regards.Like 
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