What Other Bloggers Are Saying

Some of my thoughts on risk management have been reinforced by other bloggers.

John Forman emphasizes this point: If you want to become a successful trader you need to not blow yourself up by taking too much risk and learn from the inevitable mistakes you are going to make.

Ray Barros believes that fulfilling our trading potential ultimately means we need to use a plan that suits our personality.  Rookies fail because they focus on getting the plan [strategy, etc] right.  They don't manage risk, and fail to learn from their mistakes.

Adam shares his ideas on rolling a position to lock in profits and reduce risk: (link no longer active)

"By rolling my position to a lower strike price, I not only collect my
profits first, I get to re-enter with a much lower premium,
reducing my risk at the same time."

"Rolling in options trading is defined as moving a
position from one option* to another."   Sometimes the roll is in the same month, but it's often to another expiration month.

*Adam used 'strike' and I substituted the word 'option.'

Ana Wang offers this: "Never put yourself in a position of losing more money than you can afford…get out of the losing trade once you know the trade is no longer good.  Big losses wipe out too many small winners." (link no longer active)

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