A short monologue on day-trading risk management by Kardec Trader focusing on protecting downside losses, distinguishing ‘good’ vs ‘bad’ losses, and adhering to a predefined game plan and stop-loss. Emphasizes knowing acceptable loss relative to account size and that strategies won't win 100% of the time.
Our job is to always protect our downside. Our job is to know if this trade goes wrong, how much will I lose and where am I comfortable in losing, and what is an okay amount in losing, opposed to your account size? If I'm wrong in a trade, I like to look at it from two perspectives. Number one, did I follow my game plan on this trade because there's a good loss and then there's a bad loss? A good loss is a trade that I followed my game plan right. I follow the market moves. I. I had an edge, and the edge just didn't work. And that's okay. There, there will be times. Your edge, your strategy, your playbook, your setup does not work. It won't work a hundred percent. So when it doesn't work, I need to ask myself, like, did I have a high probability of it working during the time? And if I did and it didn't work out, cool. I live with it. I'm okay. Then it goes into, did I follow my game plan? Did I follow my stop loss? Did I lose the amount of money I placed, planned to lose? And yes, we plan to lose money. So that's where risk management comes in, which I'll talk about.
