Page 402 - THE MARKET WHISPERER

398 PART 11 - Risk Management

SMART Planning the trade is usually the easy task. Sticking to the
MONEY plan is where, psychologically, things get much harder! To
stay with the plan, we need to maintain the rules for correct
money management.

This is how the result looked in my trading account:

A word of warning: even though a high risk to reward ratio seems

better, from my experience it tends to make successful trades more
difficult. By contrast, a reasonable 1:2 ratio is usually more accessible.
Additionally, despite the 1:2 ratio sounding much better than a 1:1, note
that if you succeed in only one of every three trades, you will be losing
money. However, if you go for a 1:1 ratio but succeed in two out of every
three trades, you will be profiting. The only way to choose the ratio that
suits you best is through experience. Over a long term, follow your results,
examine the ratios and see which trading method suits you.