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Greeting fellow traders and market enthusiasts!

Today’s post relates to a recurring theme that I have seen throughout my experience with trading in leveraged markets.  Throughout the years so many things have changed but the paramount and important aspects of successful trading have not changed at all.  I have witnessed countless enticements to minimize risk while leaving profit potential limitless.  My friends this has a favorable ring to it especially to the unsuspecting ear but in reality it will only slowly diminish your assets in the most painful way.  Risk management is important do not get me wrong and I will touch upon that at the end of this post.  

what is being sold, and in my opinion what is misleading about these statements is that first of all the limited risk is always everything you invest.  That will not happen with our strategies -time has proven that- but this is not a “post to boast.”  What this philosophy does is that it stops out traders very quickly and does not provide enough “breathing” room to allow the markets to seek their true value.  Leveraged markets do not move straight up or straight down!  Tight stops that are purported to minimize risk all to often take you out of the game only to see the market move in the direction where you should be reaping profits.  My friends, many times a trader may be correct in the direction of the market and STILL LOSE MONEY!  That is one of the reasons that profits in these markets are so allusive to the masses.

The amount of your trading assets that are placed into particular trades is where the real risk management is engendered.  You must be able to withstand whipsaws and not to be shaken out of the market due to a short term adverse move that is large enough to trigger any “tight” stop and then you miss out on the windfall.  Do not be misled by any statements that propose using tight stops.  The real importance is the management of how you will take advantage of an opportunity and what that opportunity presents.  The Wizard has ice in his veins there is no fear only objective analysis that is a mixture of art and science.  On occasion you may hear naysayers make comments about a market movement going against The Wizard’s positions.  As you, and thousands others now know, The Wizard has the last laugh.

My strong suggestion is to rely on our precise predictive publication which will eliminate getting caught in the trap of minimizing risk through tight stops.  This is akin to the cliche of the frog being put in the pan.  If the water is not boiling the frog will not leap even as the temperature rises.  If the water is already boiling the frog will leap immediately.  Tight stops will slowly burn you my friends a bad trade should be exited without the need for such implementation.  Please take heed to this as we do get a lot of questions on this topic.  The Wizard is not a teaching service yet we want you to earn while you learn.  We will, however, avail all members of what not to do so in a sense that is the extent of our teaching.  Perhaps if there is enough interest we will put together a seminar on what not to do but again The Wizard’s methods are proprietary and cannot be replicated without our consent WHICH WE GIVE TO YOU!  So the lesson today is to be very leery of minimizing risk through tight stops.  Tight stops is will only STOP your progress.

Be well my friends and remember to have the wisdom to trade like a Wizard.


JWM III – Is a senior editor and co-founder of the “Weekly Wizard”