Last week I talked about determine your initial risk for each trade and how you could express your profit and losses as a ratio of that initial risk. I recommended that you always have a bail-out point before you enter into a trade, but if you haven’t done that then…

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Every Trading System Can Be Described By the R-multiples It Generates

One of the cardinal rules of good trading is to always have an exit point before you ever enter into a trade. This is your worse case risk for the trade. It’s the point at which you would say, “something’s wrong with this trade and I need to get out…

Excerpted from:
Start Thinking In Terms of Risk-Reward