A proper money management strategy includes both trade and risk-control methodologies, as well as a core system that generates true alpha.rnTrade management is where professional traders make their money. In our first installment, we showed that performance of one-lot trades varies significantly when filtered based on risk as opposed to volatility. When professional traders do trade management with large accounts of several million dollars, they are sizing to maximize risk-adjusted returns and do not need to filter out trades to limit risk. Although most individual traders aren't moving millions of dollars through the market with each trade, they can still benefit from these concepts.
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