HOMEWORK ALERT – Complete your homework before starting Class 3

Chapter 2 - Risk Management: Homework #2

Completing your homework is for your own benefit.  Answers should be in Paragraph form.  If you want to succeed as a trader, you have to show motivation & discipline.

1. What is a profit loss ratio? How do you find out your profit loss ratio?


2. What metrics does every trader need to have in order to be profitable?
3. What methods can be used to manage risk?
4. How are you going to enforce max loss per trade and max loss per day?
5. What is going to be your approach for managing risk?
6. What is Halt Risk?
7. What is Float & Spread Risk?
8. What is Slippage?

Welcome to your ACTIVE - DTC: #2 Quiz

1. What is float?
2. How long does a circuit breaker halt last?
3. What can cause a trading halt?
4. What is the leading cause of failure as a Day Trader?
5. Trader A says we can greatly improve our odds of success by selecting the right stocks and chart patterns.  Trader B says we can greatly improve our odds of success by applying the fundamentals of risk management.  Who is correct?
6. Trader A says if you have a high profit loss ratio you can’t be wrong a lot and make money.  Trader B says that the profit loss ratio you trade with directly relates to the percentage of success required to be profitable.  Who is correct?