Using Effective Risk Management Tools to Increase Your Profits

The Right Risk Management Tools Can Increase Your Profits Using effective risk management tools, you can increase your profits by reducing the amount of risk on each trade you make. Reducing risk can sometimes be equated to increased profitability. Many professional day traders understand that an effective risk management plan can serve as one of the most important tools of being a successful day trader. However, many newbie traders often overlook risk management, usually to their own detriment. Win to Loss Ratio Using a “win to loss” ratio is one of the highlights of an effective risk management plan. Specifically, using a win to loss ratio works as a comparison to how many losing trade you have against profitable ones. As an example, if you had 30 total trades with only 10 losses your average would be 30:10 or 3:1, that would be calculated at ((30 / 10) * 100)  = 300) or a 300% win to loss ratio. The higher the win to loss ratio you experience, the higher your profitable levels
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