You should only take on aggressive risk after you have built up a cushion of profits. You do not change your risk-to-reward ratio; you simply increase your position sizes. Key Technical Trading Methods
In a chapter aptly titled "Fifty Ways to Lose Money," Sperandeo catalogs the common psychological pitfalls that lead to losses. By naming these enemies—such as fear, greed, and hope—he helps traders recognize and disarm them. His ultimate goal is to help readers achieve a state of emotional discipline where sound trading decisions become routine, irrespective of the chaos in the markets.
The 2B pattern is designed to capitalize on false breakouts at major market highs or lows. You should only take on aggressive risk after
: You can find "The Methods of a Wall Street Master" by Victor Sperandeo PDF on various online platforms such as google books, amazon kindle store, or apple books.
This sequence provides presumptive evidence that a trend has changed: 1. Trendline Break : The price closes across a validly drawn trendline. 2. Retest (Failure to exceed previous peak/trough) By naming these enemies—such as fear, greed, and
Risk is always the prime concern. Before asking, "What profit can I make?" a trader must ask, "What loss can I suffer?" Sperandeo teaches that the best insurance for positive returns is to keep risk at a minimum and trade only when the odds are decidedly in your favor.
Sperandeo's methods rest on a three-pronged foundation. If you violate any of these pillars, your trading strategy will eventually fail. : You can find "The Methods of a
The 2B pattern is highly regarded because it allows traders to enter a position at the exact turn of a trend with a very tight stop-loss placed just beyond the false breakout point. 4. Capital Preservation and Risk Management
This is not the same as investing 2% of your capital. It means if the trade hits your stop-loss, the amount of money lost should only equal 1-2% of your total account equity. This ensures that you can survive a string of losses without blowing up your account. As Sperandeo notes, "If you risk 25% of your capital on a single trade, you are one loss away from ruin."
"The market has no sympathy," Sperandeo writes. He attributes the failure of 95% of traders not to a lack of knowledge, but to a lack of emotional discipline.