2 Risk Management Strategies

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Brannigan discusses the importance of risk management in trading and highlights two main risk management strategies: Equal Risk Weighting (ERW) and the ABC model.

The ERW model involves allocating the same amount of risk across all trades, while the ABC model assigns different levels of risk depending on the trade's perceived potential.

Bran gives guidelines for determining your daily stop based on your objectives and risk tolerance. He further emphasizes that your primary objective as a trader is to survive long enough to figure out what works for you.

The choice between ERW and ABC depends on factors such as your experience, account size, and return expectations. Ultimately, having a risk management strategy in place is crucial for long-term success, as it ensures survival, fosters consistency, and allows you to make objective decisions without being swayed by emotions.

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