Tuesday, December 6, 2011

Trading Philosophy

The concept behind the "Zen Trading" philosophy is a tight stop and large profit targets.  With this type of money management, large returns are possible with very minimal draw down.  With each individual trade, I am risking no more than 2.5% of account value.  My stop is always 12 ticks and my first target is typically 36 ticks.  This is a 1/3 risk/reward ratio on the first target.  Depending on the trade, 72 ticks is usually the second target and the third is held until a break of trend.

More to come...


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