Risk Reward and the Stop Loss | Stocks for Breakfast
Risk reward is the most basic formula for stock traders. It gives us a foundation to asses potential trade setups.
But in the real world, the best intentions go out the window unless everything works out perfectly. And how often does that happen when you're trading?
The risk part of r/r is fascinating. many smart traders know it's a part of trading. They're okay with taking risk, but not okay with accepting risk.
What's the difference? Well have you ever moved your stop loss? If you did (we all have at some point) that means you took risk, but you didn't accept it. If you did, you would simply get out of the trade like you planned.
In today's trading education we discuss the right amount to risk, the right stocks to trade and why the real problem not the dollar amount you risk or the stop loss.
