Primary goal is capital protection. Then positive returns from investments or trading in stocks, futures, bonds and commodities. Quantitative approach for asymmetric results
With this approach the goal is to take positions where risk is limited compared to the reward it can be achieved, therefore I look for
Diversification is achieved:
Trend trades: wider in time and price.
Countertrend trades: limited in time and price.
No Trend: typically no trades or countertrend type of trades
Trades can be exploited in a multi time frame environment due to:
Risk Management is involved in the following areas:
Constant monitor all the mentioned instruments for signals, either through software screeners or human generated signals.
Once highlighted a possible candidate, a first 25% of the full size is allocated with a stop loss.
As the position goes in my favour, incremental 25% is added on retracements until full 100% is reached, with stop losses moved to break even.
A monetary stop loss is allocated first and then calculate position sizing backwards.
$$ Stop loss → % Stop loss → Size of position
Exits are three dimensional: