What is the risk?Risk - a process in which, to obtain the desired action we do, which can lead to loss of part of that - that is our ever dear to us.
applicable to trade futures on the Stock Exchange, which is the amount of money we are willing to lose at a failure to make a profit as a percentage.
How to minimize risk by trading high-risk instruments - futures.There are a lot of literature on the management of capital and minimization of risks in trading.For myself, I highlight these elements:
- value of stop - the application;
- value of risk-profit;
- amount of input on the value of the deposit;
- amount of losses on the day.
magnitude stop - application.
I enter into a transaction only when I can put a stop value of 1-4% of the collateral contract.In very rare cases, it is 5%, but aspire to positions with a stop 1.5 - 2.5%.And now the most important thing - I do not put stupid to stop by my interest, not looking at the situation and seeking inputs into a transaction where a stop will be appropriate.
Example: collateral 1 futures contract on shares of «Gazprom» (GAZR) - 1500 rubles.I enter into a deal if I see that I can put a stop-based application 1- 4% (15 - 60 rubles).Out of it a foot is acceptable, and take more risks intraday trading is not necessary.
magnitude of risk - profit.
important indicator in risk management is the amount of risk to reward.What is meant?When we enter a trading position (buy or sell futures), we must firstly understand how much we would lose if unfavorable to us the outcome (the price does go our way), but most importantly - how much we at least earn when moving in our direction.
We certainly do not know when we will not (not who do not know) how many points the price will be, but we know the price levels at which unfolded in the past and this is our first targets.Therefore we have to good for themselves to have a reference point, where we will go from the position (close the deal) and it must be a certain number.Yes, the price may go even further in our direction, but can not go.
So we get to the position we put forward, and stop movement in our direction.So the value of our revenue potential should be at least 2 times greater than the value of our stop.
Example: we buy one futures contract on shares of «Gazprom» (GAZR) at the price of 1500 rubles. (Warranty coverage).Expose feet 30 rubles.(2% of the collateral) - is the value of our risk and we should expect a return of at least 60 rubles., That is to sell a contract for 1560 rubles.Our value is the risk of profit - 1: 2.
Ideally, the ratio should be committed to risk - a profit of 1: 3 or more.I sometimes go into a deal with the ratio of 1: 1, but that in rare cases, try to go at least 1: 2.
amount includes the value of the deposit.
There is a view that you can not go the whole amount in your account in one transaction.Why is that?Because you must have a reserve of funds in the account, in case when the price is right does not go in your favor.You have to sit out the deflection rates in the opposite direction if you do not have enough money in the account, there will come a sad event, the name of which - margin call (margin requirement), if you do not make extra cash, your position will be closed forcibly.
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