Risk management is a vital part of day trading. Just like a solid trading plan, adequate risk management is meant to protect you from blowing up your account on accident. Don’t have a trading plan in place? !
“In the market, the fear of losing one’s fortune is every bit as intense as the fear of losing one’s life from an attack by a wild animal. I don’t think I could put the difference between consistent winners and everyone else more simply than this: The best traders aren’t afraid.” Mark Douglas – The Disciplined Trader.
You must have heard various traders talk about their trading plans, how they follow them, or how they prefer to be flexible despite having one. What does that mean, and do you need a trading plan? Let’s break it down.