Now that we’ve discussed the basics of the various risk parameters within trading, we can go into what I like to call tactical risk management. This is simply understanding the previously discussed issues and taking that into an intra-day or swing trade process with logical stop (risk) placement and position sizing.
So why did I go over all of those other issues before even getting to this piece, the stop placement/position sizing part? Simple, the previously discussed items I covered within this risk section are somewhat boring, common sense and should be already known yet, so many traders overlook them on a daily basis and will most likely continue to do so. My point was to put this out first and make sure they are known (or reminded) to everyone.
So what is tactical risk management? This is the process of analyzing the markets through top down technical analysis and understanding where price reaction points (trade locations) exist and establishing a line