The Best Way To Minimize Risk & Maximize Reward

I get a lot of questions regarding trade management… it’s a part of trading that is widely misunderstood. But I’m going to give you one super-ninja technique that will increase your profitability literally over-night!

This trick is what I call “trading on the edge”. Basically, get in on the pivot or “edge” of a move. This will decrease the size of your stop and increase the potential reward you have.

Check out this video where I show how to manage risk… and reward. All MAP Traders never risk more than 1.25 points ($62.50) on the S&P 500 emini, and we see an average win of about 3 points ($150). So, if we’re winning more than we’re losing, and our winners are bigger than our losers, do you think we’re consistently profitable? You bet!

12 Responses to “The Best Way To Minimize Risk & Maximize Reward”

  • Tammy Watson:
    November 16, 2009 at 12:54 pm

    Hi Chris, I’m using a 3 point stop on the ES now. I’ve tried to take it down to 1 or 2, but keep getting stopped out. Any tips you can give me? – Tammy

  • Chris Dunn:
    November 16, 2009 at 12:55 pm

    Tammy,

    Thanks for your question… The only way you can use a smaller stop like 1.25 points on the ES is to have a very structured entry strategy. If you’re getting in on the middle of a run, you need a bigger stop. Notice how we get in on a pivot? That’s the only way we’ve been able to do it.

    Hope that helps!

    Chris

  • Tammy Watson:
    November 16, 2009 at 12:57 pm

    Thanks Chris! I plan on getting the MAP program.

    BTW- I’ve followed your videos and other blog for years. Thanks for all the help!

  • Midha:
    November 23, 2009 at 2:15 pm

    Hi Chris and thank you for video. What is your opinion for scaling out of trade? I usually go in with 6 contracts and close 3 at 1 point. I win a lot but am not making money.

  • Al S.:
    November 23, 2009 at 2:16 pm

    What is that red/blue line? Moving average?

  • Thomm Walter:
    November 23, 2009 at 2:18 pm

    First off, thanks so much for doing the video. It’s a breath of fresh air to see someone putting this type of content out there. I’ve taken a similar education path as you, Chris and can say you’ve really figured this thing out. My question is this: I seem to know which trades to take, but can’t seem to take them all the time. Basically, I’m missing the good trades and somehow I end up taking the losers. Any suggestions?

    Best wishes,

    Thomm W.

  • Sue Wooding:
    November 23, 2009 at 2:19 pm

    So I’m guessing you don’t take break out trades since those aren’t on pivots? I’ve made some good money with break outs, but my stops are about 5-6 points on the S&P

  • Christopher Black:
    November 23, 2009 at 2:20 pm

    I use fibonacci retracements too, but what is that other fib area you talk about? Do you teach people the basics of all the fib tools as well?

    Thanks,

    Chris Black

  • admin:
    November 23, 2009 at 3:41 pm

    Al, the cyan/magenta line is our TML (trend momentum line).. it gauges the strength in the price trend.

    Thomm, thanks for the kind comment… the answer to your question is very simple- CONFIDENCE. If you’re not confident in your system, then you won’t execute properly. Either you don’t have a winning system or you haven’t developed your skill to properly trade it. Simple as that…

    Sue, correct… break-out trades are low expectancy trades (in my humble opinion) because the risk is so big.

    Chris, the other Fib is an extension. We have a structured way that we utilize that tool.

    Stay frosty,

    Chris

  • BagapamnHep:
    December 13, 2009 at 5:23 am

    Looks like you are a true pro. Did ya study about the issue? lawl

  • StevieTiii:
    January 17, 2010 at 9:40 am

    Outstanding. All the best to you and your colleagues.

  • gt:
    March 16, 2010 at 5:21 pm

    Hi Chris
    I have first experiencing the sophiticated so called your extension structured Fibonacci!
    I can’t get the similar Fib extension on other charting software, not even in NinjaTrader charting.
    Thanks for all the wonderful educational Videos. Would be great if i could test drive the accuracy of your software with live trial.

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Please join Chris Dunn for his special presentation at The Futures & Forex Expo

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How to Execute Winning Emini Trades with Crystal Clear Entries, Dynamic Profit Targets, and Minimal Risk
Friday, September 24
11:30 am - 12:30pm


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