Many seasoned traders know that position sizing is a vital part of any trading plan. Many beginner traders however make the mistake of not paying adequate attention to this step. They believe that it is enough to simply define the initial stops. This however is a very incomplete way of trying to manage your risks.

You may be taking a good trading risk management strategy for granted. This may be because of the common idea that handling market assets is all a game of odds. There may be some truth to this concept but it is not entirely correct to say that you are powerless.