The 5 Most Effective Risk Management Techniques that the Pros Use

Harry Nicholls
9 min readMay 8, 2018
Photo by Alex Lehner on Unsplash

Risk management. It’s a topic that comes up often in trading blogs, books, and courses. But is it really practical? I mean, if you put a trade on, then you know the market is going to go your way, right? Stops are for buses!


Risk management must be part of your core trading strategy. Protecting the money you made is the way to make consistent profit, and ensure you have a long, successful trading career.

Like I’ve said before, if you make 1,000% in 2018, then lose 80% in January 2019, you’re not going to be a trader for very long.

Trading without risk management is like skydiving without a second parachute. What happens if the first one doesn’t open?

Using indicators to make profit will only get you so far if you’re not protecting your positions.

I’m bringing the best risk management strategies to you straight from the horses mouth. Read on to find out the most effective risk management strategies that the pros use!

1) Consider Your Portfolio as a Whole to Ensure Long-Term Survival

Alexander Lowry, professor of finance at Gordon College

Alexander Lowry (@AlexanderSLowry) is a professor of finance at Gordon College, and also the Director for the school’s Master of Science in Financial Analysis program. He recommends that you view your portfolio as a whole, not just a series of individual bets.

Here’s his advice:

“There’s a secret of professional investors: on the whole, individual stock selection doesn’t really matter. What really matters, over the long term, is asset-allocation decisions. It’s not what stocks you buy. It’s when you buy stocks versus when you buy bonds, gold, cash, real estate, etc. that matters.

Several academic studies demonstrate why portfolio allocation (how much of which type of assets you own) is far more important in determining your results than simply which stocks or bonds you buy. The takeaway from these studies is that asset allocation is far more important to your total…

Harry Nicholls

Living and breathing crypto.