The success of a trading position will be purely a function of one's ability to manage risk. Whether one is planning to use a discretionary strategy or one that is purely systematic, the key to success will be a business plan that will make money. The most efficient way to start the process is to determine how much money one is willing to risk.

Systematic Approach to

Risk Management

A systematic approach is one where you enter a trade when a signal is alerted and manage the risk based on predetermined criteria in an automated manner.  A systematic approach to day trading means that you avoid overriding a trading alert. Using this approach removes some of the human element which can interfere with the strategy’s success. The risk management of a systematic approach can be back tested to determine if the approach worked in the past.