Money Management: Reward Analysis

[sultanchamp]

Hey, great video. I just have a question. If you're in a trade and you've hit your reward goal, do you jump out or would you adjust your stop loss to where your initial reward goal was and let it ride? Thanks in advance.

[AirelonTrading]

@sultanchamp Great question ... much of that depends on the tape. I may shred off some of the position profitably, and keep some of it on, while at the same time ... tightening the stop loss. In this way, I have a) taken profit when I hit my goal and b) kept a minority of the position on so that if it moves higher, I can continue to make even more money and c) adhered to money management principles

[Luiyi385]

Brilliant !

[nolo430]

2% rule...I was wondering why you should start with 25k..lol...great principal!

[Forsure3333]

Fantastic. I had to rewatch the Management videos a second time to understand better. Before investing anything at all, I prefer to fully understand what you're talking about. Otherwise, I may lose a lot of money and think that after all, investing is not for me. As you said, you have to know what you're doing.

[Forsure3333]

Hi Dan. I have not invested anything, but was excited and anxious at the same time about it. I've seen only a few of your videos so far, and I already feel more comfortable and confident about investments. Thanks for producing those videos!

[galendracos]

Good video

[MarkMillionaireGuru]

Hi AirelonTrading

I have just been watching your video and I must admit it really is very good.

I really enjoyed watching it.

Already looking forward to more of the same in the future.

Cheers to your success.

Mark McCulloch

[AirelonTrading]

Thanks much, and I'm glad you've been enjoying the videos.

Don't forget the daily blog, as the videos here at YouTube are only about 1/3 of what I put out there. The blog contains about 2/3's of the rest of the free information available.

:)

Dan

[CorkyAgain]

One thing that I would have liked to see in this video is more detail on setting a price target in order to calculate the risk:reward ratio. That's one area where I still have a tendency to be too subjective in my approach.

I just discovered these videos after doing a search for info on money management. They're some of the most helpful things out there. Thanks!

[AirelonTrading]

You're more than welcome.

Good point, and I plan on putting more videos in the future - into the "Charting 101" series

[AirelonTrading]

One video where you might find some more helpful information - is the video I have on Trade Management ...

There's a video reply to this video where I talk about the need to look to volatility.

[thetwin76]

Hi Dan

Two questions: Do you use stop loss limits in your investment portfolio(e.g.bank of ameri.)and whats your time plan as a swing trader.

Thanks

[AirelonTrading]

No, when I invest, I view the entire amount of capital as 'at-risk'. So buying BAC? I'm with BAC as an investment until it hits one of two things: $100 or the equivelant of $100 through splits (At which point I would turn the DRIP off, and receive straight cash), or $0.00

When I swing trade (and use stop loss orders :^) ) I generally have a 3 to 5 day timeframe, although I've had swing trades last as many as 15 days. In 2007, I averaged about 11 days in a trade.

[thetwin76]

Sorry about the "order" mistake. German is my native language and we call it stop loss limit but i think i got the point across.

[AirelonTrading]

No worries mate, yeah, I understood what you meant completely.

[AirelonTrading]

Really good question though. I wish I would have remembered to put that difference in my risk video.