weekend thread early... topic: risk management, page-33

I neglected to add a few of my risk management trading rules to my original post.

1. Never average down.

2. I never moves stops away from my original entry price. Exposure is always reduced.

3. Averaging up is ok but I always maintain the same (or less) dollar risk. For example, if I buy an extra contract as a winning position moves in the right direction, I adjust my stop so that the risk in absolute terms is the same or less. Usually it's a break even stop that has to be moved since the average entry price has moved in the direction of the trade. This adds extra leverage to a winning position but no extra risk. Leverage is a good thing when you are winning, not when you are loosing.

4. Never add to a margin call. I've never had a margin call but if it ever happens, it's an exit signal.

What rules do other people have?