Money Risk Management JBL Risk Manager (JBL RM) Help

Money Risk Management JBL Risk Manager - JBL RM8 - Tutorial & Quick Start Guide

To begin Hit "Try" within the 14 Day Trial Window

Please quote the Trial Registration No. when ordering. You will be sent an email with the file RiskManager.key   This will remove the 14day trial window.

Save this file onto your desktop. Open JBL Risk Manager Click on Install License | select RiskManager.key which was saved on your desktop | Open | OK then Close [X] program | Re-Open JBLRM8.

   

Click below to view some sample trades on YouTube
 http://www.youtube.com/watch?v=hlw-HDVyl8E

Click below to view 10 minute tour of JBLRM on YouTube
http://au.youtube.com/watch?v=CR7Oerl0YfQ

Click below to view short 2 minute Intro on YouTube
 http://www.youtube.com/watch?v=vTkT6H-5oIQ

  

 

 Quick Start Guide

 

  1. Click on "Create New/Load Portfolio" | name it | "Create New Portfolio" 

  2. Click “Settings” | Select Short, Medium (Default) or Long Term Investing

  3. Select “Currency Symbol” (default $ )

  4. Update Brokerage Fees & Charges – Long Trades & Short if applicable

  5. Click Add Dir(s) enter Metastock path step by step and Save Settings

  6. Click “Manage Capital” | enter Starting Capital | hit “Deposit”

  7. Click “New Trade” | Long Trade default or tick box to select Short Trade

  8. Click in Symbol Box | Click on correct Folder to lookup and/or

8b. Enter Symbol in Security Box | OK if correct company

  9. Click in “Buy Date” box | Click on the anticipated Buy Date | hit OK

9b. Enter (Industry) Sector to monitor sector risk

10. Correct actual Buy Price if it varies from last Close price

11. Update Trade Journal / Diary and Close [X] program

12. To open another trade Open JBL Risk Manager

13. Select Portfolio (if it does not automatically appear)

14. Repeat from Step 7

 

and continue to protect your Trading Capital!

Important Stop Loss Placement Article (Money Risk Management principles)

 
Every trader and investor needs that professional "edge" or they are destined to fail. That edge is implementing correct Money Risk Management principles in their trading decisions. The professionals use them and NOW you can too.

What I am sharing with you here today is not anything new but a strategy used by professional traders globally in all markets for decades. I am going to simplify these principles for you so that you can understand them and have the confidence to implement them in your trading and investing.

I will begin with Risk Management or Stop Placement. The professionals use various technical analysis techniques that are "invisible" to the majority of novice and seasoned traders.

How does the market always seem to "know" exactly where your stops are?

Have you been frustrated by the market triggering your stop, and then rebounding back in the preferred direction of your original trade?
Perhaps you feel that the market was intentionally gunning for your stops?

The bad news is... They are! Stop running or Stop gunning is a common technique employed by Floor Traders.

Definition: 
Stop-running or gunning (both terms are used) occurs when a price is pushed through a support or resistance price level in order to trigger the stops that are hiding there. After the stop supply is exhausted, the market bounces back in the other direction, usually winding up where it was before the exercise began.

Professional Traders know where your Stops are......

so where should you place your initial Stop Loss?

Your stop loss acts as a trigger and is a price level at which you will exit the trade. This price level should be determined prior to the trade being opened.

The Stop Loss is the point at which you will exit the trade "no questions asked". A stop loss will help preserve your trading capital to make sure you can trade another day.
Remember, a stop loss is simply a price level where you must take action and close that trade first opportunity and move on.

Here is a typical example of how you could calculate your stop loss....
John has decided to buy $20,000 worth of "XYZ" shares using a portion of his current $50,000 (the author would not risk more than 20% of his Trading Capital in any one trade e.g. $50,000 x 20% = $10,000) and has decided not to risk more than 1.5% of his trading capital on the trade.

The current share price of "XYZ" is $2.00, so John calculates that he is only going to risk $750 on this trade (1.5% x $50,000). He buys 10,000 shares of "XYZ" at $2.00. (The author allows for brokerage fees in this calculation)

John calculates his initial Stop Loss for this trade to be $1.925 (($20,000 - $750) / 10,000), so if hit the maximum loss will be $750 and John would immediately close this trade and sell his holding in "XYZ".

A trailing stop is a price level which moves in accordance to the share price.
If you can imagine the share price constantly rising, you would want to protect some of the unrealized profit. You can do this with the use of a trailing stop loss, the same concept of a stop loss still applies. That is, the trade is immediately exited when the current price reaches the trailing stop loss price.

The most important thing to remember about any stop loss is its importance in signaling an exit point where you must act and close that open trade. Many believe the exit is far more important than the entry.

After share trading, educating and selling various forms of Technical Analysis Stock Trading Software both to novice and seasoned traders for over 10 years I found both Technical and Percentage Stops were being placed in or around the same price level by the majority of traders and investors. These were triggered and closed usually just before the share price rebounded back in the preferred direction.

These Stop Loss price levels were generally near major support and resistance or if you look at the market depth you will find them at key 0 and 5 price levels. E.g. $1.10, 2.20, $1.85, $2.25, etc.

so I researched and found a Stop Loss Placement strategy that would control the risk I was exposed to but would still best optimize my trading capital. It produced a far less frustrating result and also prevented me from over trading.

The strategy I use is based on 2 very important rules. The first is to never risk more than 2% of your trading capital on any one trade! The second rule is limiting trade value for any one trade to a maximum of 20% of your trading capital, allowing for brokerage.

e.g. I have $25,000 in Trading Capital, last close is $10 and I allocate a maximum of $5000 (20% x $25,000) on this trade, brokerage is $50 each way ($100 round trip).

So my maximum risk of 2% is $500 less brokerage = $400 so I buy 470 shares ($4,700 + $50 brokerage = $4,750)

I set my stop loss at $9.15 risking 85c per share or 8.5%, so if my Initial Stop Loss is hit I have only lost a maximum of $500, which includes my brokerage. ($9.15 x 470 shares less $50 brokerage is $4250.50 from $4750 is $499.50)

This makes determining your Stop Loss price level harder to determine by the market as it is NOT based on Technical Analysis or logical price levels but by correct Money Risk Management principles and your risk tolerance. These values and many more are all calculated for you automatically with JBL Risk Manager version 8 (JBLRM8) and I urge you to trial it for yourself.

 
Trial JBL Risk Manager NOW 2 enjoy simplicity, stress free trading and simple reporting.

 

 

 

 

 

 

Disclaimer: Park Avenue Consulting provides the material on this web site for informational/educational purposes. Investments and investing strategies are personal, conditional on many factors. No mention of a particular security on this site constitutes a recommendation to readers to buy, sell or hold that security. No discussion or evaluation of any particular investing strategy on this site constitutes a recommendation to readers to employ the strategy. Readers are responsible for their own investment research and decisions and seek qualified advice.

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