Trader Resources : Trading Strategies for Speculating : Determine Risk Capital
The third step involves determining risk capital. To do this, determine the amount of risk capital you have, and limit the risk you assume on each trade relative to the amount of risk capital you have.

• Maintain some flexibility.
• Add only to profitable positions.
• Liquidate according to your original profit strategy.
• Limit the amount risked on a single trade.
• Maintain some free capital for new opportunities.

<< Prev | Next >> | Resources Menu