Risk Management 5% Rule - Do you have an adrenaline rush when your trade is trending, or when trading in general?

[kellie]

This question was asked in the Elite room recently.

Do you have an adrenaline rush when your trade is trending, or when trading in general?

Christopher, an experienced trader responded.

Try to calm the emotions and just trade your probabilities. If you are emotional or excited, that will make you get out too early, or enter too late, or violate your rules.

Also, if you are emotional then a person may be risking too much per entry.

For understanding on how to manage emotions while trading, and keep a clear balanced perspective read… Trading In The Zone, by Mark Douglas.

For understanding on risk management and Darrell’s preferred 5% rule see the below links.

Risk Management and Your Frame Of Mind The 5% Rule

Risk Management, 5%, five percent, five percent rule, 5% rule, five percent plan, 5% plan,

3 Money and Size Management Models

By Darrell Martin You may have noticed that there are almost as many trading strategies and money management systems as there are traders, if not more. In this article, we will compare three different money and size management systems to help you get a grasp on which one may be best for you. The first one we’ll look at comes from the article “A New Interpretation of Information Rate”, by J.L. Kelly published in The Bell System Technical Journal, 1956: 917-926. This is known as Kelly’s Ratio. …

[kellie]

Below is a cheat sheet card format Craigmac from Elite Room designed for himself to easily follow the 5% risk management rule. He trades futures.

Month_____________________ 2017 Goal for the Month $____________ Relates to _____________number of ticks Which is $_____________per week. OR $______________per day. Dollars Which is #_____________per week. OR #______________per day. Ticks

I will be trading _________ and _@ $ per tick & $________per tick My SL will be #_ticks and #@ $__________per tick MY TP will be #_______ticks and #_______ticks OR I will be Trailing my SL OR doing Both

This works out to be #______ of profitable Trades per day. This works out to be #______ of Max Loss Trades per day OR Max of 6 Losses (based on Month Starting Balance & 5% Rule)

My Daily Profit Target is $______________ based on Starting Account Balance My Daily Max Stop Loss is $_____________ based on Starting Account balance