Page 19 - Psychology Course Study Manual

wants and needs to change. The trader needs to understand how improper “Trade-Size”

actually hurt their trading.

Novice traders tend to focus on the trade outcome as only winning and therefore do not think
about risk. Professional traders focus on the risk and take the trade based on a favorable

outcome. Thus, “The Psychology Behind ‘Trade Size’” begins when the trader believes and

acknowledges that each trade’s outcome is unknown when entering the trade. Believing this
makes the trader ask them self, how much can I afford to lose on this trade and not fall prey to

the “risk-of-ruin?” When traders ask themselves that, they will then either adjust their “Trade

Size” or tighten their stop-loss before entering the trade. In most situations, the best method it

to adjust your “Trade Size” and set your stop-loss based on market dynamics.

During “draw-down” periods, risk control becomes very important and since good traders test

their trading systems, they have a good idea of the probabilities of how many consecutive

losses in a row can occur. Taking this information into account, allows the trader to further
determine the appropriate risk percentage to take on each trade.

TradersCoach.com has just released a premier PC software product called the “Trade Size

Calculator” which helps trader determine their appropriate “Trade Size” based on several

variables the trader inputs into the software. This calculator takes the guess work out of
determining “Trade Size” and greatly helps to reduce the “risk-of-ruin” inherent in trading. The

“Trade Size Calculator” by TradersCoach.com is easy to use and will help traders determine the

maximum “Trade Size” for every trade thus ensuring your winning trades will be as profitable as
possibly, while maintaining potential risk control.

No matter what trading system you are using, I highly recommend using this “Trade Size

Calculator” PC software! Not only will you be reduce the “risk-of-ruin” but you will more than

likely trade with less anxiety knowing that if you do get stopped out at a loss, that loss should