Risk To Reward
If the risk is small and the reward is great time and time again one will be rewarded time and time again with little losses."
What Is Risk To Reward?
Risk to reward is a concept of entering a position and only allowing it to go a small percentage against you in order to make a much larger percentage if the position moves in the forcasted direction and price range.
Tip
Play around the whole numbers of stock espesially the $5 dollar and $10 dollar prices. This could be $5, $10, $15, $20, $25 and so on...
This can give you great risk to reward and an extra cushion of security. If you buy a stock after it dips down to $20 shows support then you can ride it back up at least 50 cents or sell it at a loss if it goes through the whole number in the $19.90's. Whole numbers can be great levels of support or resistance and provide larger rewards.
The 50 cent marks are also levels that provide support and resistance more than other numbers.
Money Managment
Money must be managed in order to reduce risk. Generally day traders do not use all of their available funds on one trade. This could be devastating if a trade moves against you (this is always a possibility in a world of probability).
Day Trading Tips - Related Resources
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