Trading is a long game, not every trade will be a winner. Therefore, you need to know how to properly manage your winners and losers. Therefore, we have created this page to give you a basic overview of fundamental risk management which should keep you profitable. Time and time again, traders have blown their accounts from not implementing proper risk management, don’t become one of these people!
Firstly, we always recommend to aim for at least a 1:1 risk/reward ratio (RRR) on every trade. This means that you only risk as much money as you stand to gain. For example, if your stop loss is at $10, your take profit should also be at least $10. When using the NoBull Software we find that we get an average RRR of 1.5 to 2. However, this is dependent on areas of resistance and support.Never use a risk reward ratio of less than 1:1 (<1;1), as this means that you are risking more money than you stand to gain and will be detrimental to your account in the long run.
Second, we recommend that each trade you take only counts for up to 1% of your account size maximum. This is also dependent on account size. As an example, we suggest that traders with $100,000 accounts aim for a 1% daily return ($1000). Thus, 4 trades at 0.25% risk each would amount to a 1% gain. Those with smaller accounts can trade up to 2% or even 3% but we class that as aggressive. This is for traders who are comfortable with our software or their own strategies. For beginner traders and people who are new to using our software and accounts, you should use a lower risk percentage per trade. These guidelines are here to help grow your account in a stable manner, the road to financial freedom takes patience.
Third, we recommend beginners to use position size calculators for every trade to ensure that we are entering trades at the right risk and lot size which abides by our risk/reward ratio and risk percentage rules. The position size calculator we use is here: https://www.myfxbook.com/en/forex-calculators/position-size.
Please see the video to learn more on how to use this feature. We also implement trade management. When a trade reaches 25% - 50% of its TP, we look to move stop-loss to breakeven. Once a trade reaches 75%+ of TP we start to aggressively trail our stop loss to lock in profits.
At the NoBull Trading Group we want all our customers to be successful and we take pride in what they do. All of our products and services are offered to propel a traders education, understanding and profitability. For more advice on risk management please contact us via the form or the chatbox and one of our advisors will get back to you.