Perhaps my words risk management is 99% were misunderstood as I did not explain what is meant by risk management.Off Course Entries,Exits and profit management is integral part of risk management.I will explain the risk management in full detail latter as I have some time constraints but still I will give a birds eye-view of factors that constitute risk management.
Following are the factors that are vital in risk management.
1-Risk v Reward (covers loss and profit management)
2-Probability (Likelihood of event happening in your favour or against)
3-Position sizing (orders management , Orders lots involved)
4-Expectancy (Per trade profit/loss irrespective of number of winners or losers )

The law of large numbers is a principle of probability according to which the frequencies of events (entries and exits ) with the same likelihood of occurrence even out, given enough trials.
This is law of nature no champion stays champion forever and mediocrity is not eternal either. In simple words if you do any activity over a prolonged period of time your results tend to be average.Which means probability of success or failures averages out.
There is difference between risk management and gambling.Gambler want to finish the game in one try neck or nothing, while risk managers use the law of average of numbers and devise the strategy which gives then chance to give at least 100 tries to loose the whole portfolio rather than in a single or few tries.
I spent $US 10,000 on a course to learn this concept only and when the course was over and no indicator or other trading software was given by the presenter I was feeling how stupid I was to spend this much money and getting no software , indicator or trading system.
Then after few days feeling foolish I gave second thought to the ideas presented in the course and repeated it about 100 times and figured it out that this course was worth $millions and not only $10,000.
Once you understand this concept no matter what method you use (order flow or indicators) to rationalize your Entry Exit decision you will become a consistant trader.
You can devise a startegy by any combination of first 3 variables and stay profitable if you keep discipline and divorce fear and greed and
follw that strategy which has a positive expectancy no matter how small but positive.
Now I will just pitch one example to substantiate my view point how is risk management 99%.
Let us say you have an account of $1,000.00 in any forex brokeraage account which does not limit lot sizing means no margin restrictions.
one Trader with gambler mentality enters the market with number of lots that wipe out his account if market goes against him/her just 10 pips/ticks and market moves against him on 1st trade.His account will be wiped out and he is out of the game no matter how good set of indicators or Order-flow tools he/she has available are now of no avail.
On the other hand there is a trader with risk-management approach and well devised strategy let us say with the following parameters.
1- Risk V reward $1:$20 (1:20) (10 tick/pips stop loss and 200 tick/pips profit target)(pips/ticks being the smallest price movement used alternatively in forex and future markets )
2-Probability Winning 20%
3-Position Sizing 1 micro lot ($0.1 profit loss per tick/pip)
Now If you do 100 trades the following will be the results
80 loser trades = ($0.1*10+$0.2 (round trip commission))=$1.2*80=$96 loss, which is $80 stop loss and $16 commission
20 winning trades =($0.1*200)*20 -$0.2*20)=$400-$4)=$396 Gain which is $400 gain on 20 trades minus $4 commission on 20 trades
Net Gain=$396-$96=$300
So if you even reduce the winning probability to 10% you will have loss $90+$18 commission=$108 loss on 90 losers
10 winners = $200-$2 commission=$198 Gain net gain=$198-$108=$90
Now I am bale to do % calculation as per my perception in above scenario of 20% winning probability this trader has to do consecutive
about 1000 loosing trades to blow out his $1000 account and 2nd scenario 10% winning probability the trader has to do about 900 consecutive loosing trades to blow out his $1000 account.
so loosing everything in one or couple of tries or loosing same in at least 900 to 1000 tries is even more than 99%. This was my perspective of saying trading is 99% about risk management than just order flow or indicators.

I respect every bodies opinion in this forum and this forum is not about winning arguments but give your honest feed back and share your experiences so that it may help those who are struggling or a novice in this field.
With this risk management approach you can develop even 1:100 Risk reward strategies where you will need only about 2% winning probability to be profitable.
For sure the factors like news, geopolitical events , fundamentals etc few to mention have a great influence to choose a suitable strategy.
In a dead market you can not play big risk reward strategies while in turbulent days or high volatility days you can play even 1:100 risk reward strategies. Markets opens and closes and different sessions open and closes like Asian session, London session and North American session
all have different volatility and different market behavior but if you observe for few weeks it is not difficult to figure out what stretegy you need to play for that particular market or instrument for that particular time.

Interestingly enough I am always shocked when traders talk about risk management and they never mention diversification. It's as if fundamental risk Management principles don't apply to trading.

90% never mention diversification because 90% don't win long enough to even begin to trade their system across different symbols mkts etc. The law of large numbers may work always so long as you have edge but that edge might only need 3 to 10 markets with 5 lots instead of 15 to 50 lots in 1 market.

What if instead of stopping out you use profits from another trade in another market to help offset your losses! That would be risk management.

Do you trade or buy just 1 stock..nope. risk management is diversification and this is where machines outcompete humans. Black box trading is to trade multiple markets at same time. Thus mitigating isolated single market risks! Especially once size is put on and again computers can trade 100s of mkts at once!

The law of large numbers is reality but how large is large? It's enormous!

Diversification is the key to making long term consistent money in my opinion. Can be done by humans but you must be quick about it. Few ever backrest buying a 1 lot at the open in crude the sp500 and the 30 year bond then closing them all out at the close and sharing those results. It's always just 1 market!

HiLatencyTRDR HLT 

Interestingly enough I am always shocked when traders talk about risk management and they never mention diversification. It's as if fundamental risk Management principles don't apply to trading. 90% never mention diversification because 90% don't win long enough to even begin to trade their system across different symbols mkts etc. The law of large numbers may work always so long as you have edge but that edge might only need 3 to 10 markets with 5 lots instead of 15 to 50 lots in 1 market. What if instead of stopping out you use profits from another trade in another market to help offset your losses! That would be risk management. Do you trade or buy just 1 stock..nope. risk management is diversification and this is where machines outcompete humans. Black box trading is to trade multiple markets at same time. Thus mitigating isolated single market risks! Especially once size is put on and again computers can trade 100s of mkts at once! The law of large numbers is reality but how large is large? It's enormous! Diversification is the key to making long term consistent money in my opinion. Can be done by humans but you must be quick about it. Few ever backrest buying a 1 lot at the open in crude the sp500 and the 30 year bond then closing them all out at the close and sharing those results. It's always just 1 market!

For sure if you have sizable portfolio diversification is also one of the complementary factor that helps . Playing multiple markets at a time manually is not an easy task though.One other variant of diversification is playing a single or couple of markets at their appropriate time.Which means you don't always trade single instrument but different instrument at their maximum volatility probability times. Like CPI reports, Job Reports , Interest Rate decision days, earning reports ,sales reports etc.If you have an edge this variant helps a lot.This way You are having at least about 22 such reports a month which are market movers.So trading just those times gives huge opportunities to capitalize on your edge.

I trade worse with diversification. It actually took me many years to stop trading other things besides s&p futures. Even just watching other stuff I trade worse. I'm not saying anyone should do that but it is something I learned about myself.

Why? My theory is I eventually gained a "feel" giving me confidence and respect for the market. I can get that feel with oil, treasury, gold, other indexes, wheat, forex, etc but trying to context switch messes me up and knocks me out of the zone.

There is no right way or wrong way. The right way is what works for you.
Obviously you are a discretionary trader who bias contexts the market from either your gut or your own way of internalizing all your info.

Nothing wrong with that way at all especially since diversification takes lots more money and eyes but system traders try and apply to many markets and see what the diversified outcome is during different market regimes.

HiLatencyTRDR HLT 

There is no right way or wrong way. The right way is what works for you. Obviously you are a discretionary trader who bias contexts the market from either your gut or your own way of internalizing all your info. Nothing wrong with that way at all especially since diversification takes lots more money and eyes but system traders try and apply to many markets and see what the diversified outcome is during different market regimes.

Correct
regards

This thread brings up just how deeply complex trading is and how simplified so many retail want to make it. We are barely touching the surface because there are stocks bonds REITs ETFs global everything crypto etc.

I will say I am a proponent of being a specialist in 1 or 2 markets for day trading.
Each market has its own nuances and ebb and flow and in order to get profitable on day trades one needs to be in sync with the waves and how they change at times as well as when a rogue wave or 2 hits and then sometimes you have a tsunami ! I think the best parallel for mkt movement are the ocean waves bouncing and acting and reacting based on different wind patterns seismic activity moon gravity pulls and human ships glaciers etc. These waves resonate and trend for awhile then reduce in there volatility but then you might get a tidal wave or like the opening volatility the tide comes in or goes out. Then you have random weather that creates unusual wave activity. Try studying buoy wave height charts and see how periodic and trendy it is then also look at it during storm times and see how blown out and unusual the waves can be . Anyway
The bottom line here and I'll end my thoughts on this topic is that there truly is no right or wrong. All the books that say the same crap don't amount to anything. You can go against trend and make money. You can never cut losses and make money you can make money in almost any mkt so long as you stick to your plan and keep at it.

Skill is the name of the game. You must have perfect play. Think ok. I want to be a black jack card counter. Card counting is legal. But it's not that easy to do. Forget that casinos will kick you out ok but aside from that to play blackjack 21 and card count then you must have perfected ...what is called perfect play. You must always play perfectly following the rules for splits etc and hitting not hitting and that is just to be at the table king enough to finally have that deck edge in your favor based on your count where then you must immediately start to bet very very large and play multiple hands if possible. You can sit at the table for hours until this finally happens all the while dealing with tourists I e. Retail traders happy to lose. They don't know you are a professional card counter. But my point here in trading is that you must have your own form of perfect play. The basics could be..buy with trend...sell losers when long. So that means this must be perfected first and even if it's a net loser for hours on end all it will take is for you to see when the mkt or deck of cards is finally edging in your favor and you start to bet large. It is also called a babe Ruth effect. You can make kits with basehits but you can also make lots if you are great at only swinging at the perfect pitches that might be grandslams or triples. What you can't do is swing at everything and that is why not having a position is a very good position which is why cutting losses works. Because it gives you and the market time to watch waves and pitches to get back in and swing at the good ones.

I could go on for hours and write a book on my own thoughts on the markets,but they are my thoughts and my hope would only be that my thoughts get your thoughts going and I have wet your appetite for your own understanding and thinking about the market in your terms not mine.

Indicators work very well at times and are very confusing at others. This is on purpose! It is how they work mathematically. If you can understand when they work better and when they don't and in what markets and when then combine them perhaps with your discretionary bias and it other fundamental or technical reasons to buy or sell then maybe with some luck also you just might make some money.

I'm long natural gas futures right now since this last Friday in the 5% dip. I have 3 lots which actually a big position for me to hold overnight. I am on a swing trade for this and I hope to exit by the end of this week with some sizeable profits. My average price is 2.04. which I thought was the bottom! But nope I was early. I am not using a stop. I am probably going to add 2 more lots. 1 if it hits 1.90 and one more if it hits 1.82. I hope it doesn't but I'm nervous because they proved they can take oil negative so why not press natty to the single digits and bankrupt Russia. Anyway. It's a risk. My get out point will be discretionary based on current situations. I am not hedged. Wish me luck.

Good trading to you and happy Easter you money grubbing addicts!! Bahaha me too

I feel that all the indicators that come with platforms do about the same thing, and act somewhat like a moving average. I think that if you don't understand how the market works, and you just try to trade like it is a black box with candle sticks or whatever, it is very difficult to be successful, even though it might be possible. I find it odd that people draw these supply and demand zones where they think where the price goes down and forms support that this is supply. Supply is the liquidity provided to the market by liquidity providers. They place limit orders on each level that I think is algorithmic these days. These limit orders take the other side of market order trades, and there are people who get paid just to be liquidity providers in the market. The liquidity is the supply of the market. When the market is very volatile, the liquidity providers don't provide much liquidity, so this is low supply. This allows the market to move much faster on lower volume. If there is panic on low liquidity, you can get massive downward market movement. Crashes usually happen like this. So, this is a low supply situation. The market must take out the liquidity at a level in order to move through that level. So, there is sell side liquidity above, and buy side below.

Trends reverse on either side, either because of too much supply, (absorption), or because of little demand, (exhaustion).

HiLatencyTRDR HLT 

This thread brings up just how deeply complex trading is and how simplified so many retail want to make it. We are barely touching the surface because there are stocks bonds REITs ETFs global everything crypto etc. I'm long natural gas futures right now since this last Friday in the 5% dip. I have 3 lots which actually a big position for me to hold overnight. I am on a swing trade for this and I hope to exit by the end of this week with some sizeable profits. My average price is 2.04. which I thought was the bottom! But nope I was early. I am not using a stop. I am probably going to add 2 more lots. 1 if it hits 1.90 and one more if it hits 1.82. I hope it doesn't but I'm nervous because they proved they can take oil negative so why not press natty to the single digits and bankrupt Russia. Anyway. It's a risk. My get out point will be discretionary based on current situations. I am not hedged. Wish me luck. Good trading to you and happy Easter you money grubbing addicts!! Bahaha me too

Good luck my friend
So far month of April is concerned the close price of NG for April month has never been below open price of April for about last 40 years plus including the El Niņo event occurred in 2015-2016.So I hope your trades will be successful because of timing.I just marked the April 2nd Close price ($2.035) to manage my trading bias.

I trade natural gas only in April with two accounts on a 2 renko chart with Sharkindicators bloodhound and Blackbird automation tools using my swing indicator. One account trades short with 5 lots on a swing of 132 ticks move upward augmented by supply and demand tools in 24 hours with a 1:20 Risk Reward(4 ticks stop 80 ticks Profit Target with also daily high and low water mark limits).While the 2nd account trades only long at 132 ticks daily swing low with 1:20 risk reward. All positions flat at market close.So far account with short trades is having more success than with long trades but both are running with positive expectancy.if it goes to $1.90 I will be playing only with long bias with 1:50 risk reward strategy.No trades below that level.
I am doing it since 2017 and so far every year is going very well.These days daily average volatility is between 100-132 ticks so I strategize on 75-80% of the daily volatility to be on safe side.This works for me on live personal money accounts and also Funded programs as well.
Financial markets are extremely manipulated and to call a bottom or top is out of question, you never know what the powerful has in his mind.There is no level playing field for retailers and the smart money. So in my view, playing without risk management is very risky.We have seen Crude oil in recent history, April 20, 2020, trading between $40 to -$37.63 within couple of hours.Even $100k accounts with just two lot open positions were blown out in just two hours.I was trading on that day with the same strategy 1:20 risk reward, 5 ticks stop loss and 100 ticks profit target at suitable swings augmented by supply and demand levels and made $85,000 plus just trading two lots at a time.I stopped trading at $10 price level as I had long bias at that price level.So my strategy was ready to trade long when price was to cross above $10.0. That day winning probability went above 70% for me.Same day my friend sitting right next to me blew his $115,00 account as he opened his 1st long trade at $9.5 saying these words to me "are they gonna sell it for free" he kept adding positions and added to max 5 st lots when price reached $2 level but the manipulator kept manipulating it and market was halted at negative $37.63.00 we were seeing loosing money but were unable to close positions.They made sure to wipe out every single retailer and small guys.All those accounts without good risk-management safeguards were auto liquidated because of margin limits reached.And when the market opened after halt it opened at about $10 plus.It means after halt retailers did not have chance to enter below $10.And as my strategy was at $10 Long it triggered long order at $10.04 but it was filled at $35 level about $25 plus slippage this trade hit my emergency stop level of 50 ticks as my automation strategy stop was at $10.0.It means the smart money did not let any retailor trade below $2 before halt and below $S35.0 after halt as their iceberg orders were coming over and over and those suppercomputers were hanging our computers with huge volumes.

This is what the manipulated media was saying on that day "This was due to a combination of oversupply and a collapse in demand caused by the COVID-19 pandemic, which led to a glut of oil on the market and limited storage capacity."
After market resumed within one hour the same media was saying this"it resumed at a higher price level of $10.01 per barrel. This means that the price of oil had increased significantly from the negative price of $37.63 per barrel that led to the trading halt. The increase in price was due to several factors, including production cuts by major oil producers and a gradual recovery in demand for oil as lockdowns and travel restrictions were lifted in some countries.
My question is this how come all this got managed in just two hours that supply demand and storage issues were resolved .Where were the regulators did any body spoke.

Here is how this manipulation works.For commodity markets retailers have max lot size limits, for example 100 standard lots for an individual retailer for crude oil ireespective of the capital in his/here account.While the hedgers who physically hold crude oil stocks have no such limits they can go any limits.So those people can take market to any level without any loss.Here is how they can and they do it.
They don't pay any trading fees per trade like us retailers rather pay lump sum amount for the whole year irrespective of their trade numbers.As they have physical commodity means have long positions now they can go and open equal amounts of short positions in future markets now they are hedged.Now smart money can take the market to any direction any limit anytime without any losses.
This is true about any market in the world.
So need to be watchful without risk management we can loose in one day what we made in years.

Happy easter to everyone