You know what it's a risk unit?

If a trade isn't working do you know how much are you going to lose? check this entry to know more about it

If you read Trading in the Zone the author uncovers the underlying reasons for lack of consistency and helps traders overcome the ingrained mental habits that cost them money.  He takes on the myths of the market and exposes them one by one teaching traders to look beyond random outcomes, to understand the true realities of risk, and to be comfortable with the "probabilities" of market movement that governs all market speculation; for that reason the know your risk unit is so important, but first what is a risk unit?:

The risk unit is the maximum amout of money you could lose, on a single trade in other words an amount that enables you to continue to objectively the market opportunities without any emocional trading or mistakes taking place.


Now how calculate the Risk Unit?


Money ready to lose: 50 USD


Amount of trades per day: 10


Then divided 50/10 = 5 usd


5Usd is your risk unit the maximum amout of money you could lose, on a single trade. If you want to go deeper, to find out your daily risk and the shares per trade download the Risk Calculator and have this practical tool.


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