Sentences with phrase «chance of trading losses»

Not exact matches

Consequently, you're now trading both «call» and «put» options, thereby minimizing the danger of making a loss on all the options, and maximizing the chances of gaining from any one of them.

Volatility is hugely enticing for many traders, offering the chance for quick gains (counteracted, of course, by the possibility of quick losses) and short term trading.

This is how you should view position sizing; always adjust the number of lots you trade (position size) to meet the stop loss distance that gives your trade the best chance of profiting.

The more you fight against the inherent risk of being a trader and try to close your trades out early, before they hit your pre-planned stop, or perhaps not even use a stop loss because you are «sure» the market will turn back in your favor, the greater the chance of you losing a lot or all of your trading money.

Forex Trader A risks 5 lots and has a stop loss of 50 pips, Trader B also risks 5 lots but has a stop loss of 200 pips because he or she believes there is an almost 100 % chance that the trade will not go against him or her by 200 pips.

While all securities investments pose a risk of losing the capital investment, trading securities increases the the chance of profits and losses.

Margin trading provides the traders with the required leverage, however, along with high leverage and high returns, there are also chances of huge losses.

Know your Risk Tolerance: because of the volatility of forex market and also of the pair a trader selects to trade, the chances of a loss maximize.

Traders often make one or two mistakes when it comes to determining risk; they either define the reward first, which is a mistake born out of greed, or they put a stop loss on the setup that is much too close to the entry to give the trade a chance at working out.

A better trade entry can significantly improve the risk reward potential of a trade as well as get you a better stop loss placement which can decrease your chances of getting stopped out of a big move in the market.

In other words, give your trades a chance to play out in your favor, stop prematurely closing them before your stop loss is hit, just because you are afraid of absorbing a full loss.

The logic behind my decision to trade without a stop loss was / is that if i set a short take profit level, say, 20 pips, there are higher chances that the market will hit that level than the chance of it going to say, 100 pips against me.

This is where position sizing comes in; you need to find the safest place for your stop loss so that it gives the trade the best chance of working out, after you determine this level you must then calculate the correct position size, or number of lots you will trade so that your previously pre-defined risk amount is not increased or decreased.