People react to the prospect of risk at two levels: they evaluate risk cognitively, and they react to it emotionally.

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identify trending and nontrending markets identify trending periods determine non trending periods trading periods than during trending periods differentiate between trending and non-trending periods shift the profit distribution curve to the right shift the profit distribution curve to the left shift the loss distribution curve to the right shift the loss distribution curve percent loss distribution shift the loss distribution curve to the left shift the loss distribution curve to the right position sizing requirements winning and losing trades percent winning trades percent winning trades distribution percent losing trades distribution shift the loss distribution curve percent losing trades distribution % winning trades distribution % winning trades distribution average negative Reward/Risk Ratio winning and losing trades histograms winning and losing trades distribution linear equity growth increase the number of units traded incrementally Maximum contracts in any incremented trade tolerate during the course of trade add units to an open position adds units adding units Maximum trade drawdown Incremental contracts after losing trade incrementing the number of contracts Contracts after losing trade Consecutive losing trades before incrementing trading method trading system keep risk rather constant last position added manage trading profits Underwater Equity Shutdown Drawdown Based Increment by Percentage Drawdown Based Increment Drawdown Based Increment by Dollar Amount Pyramiding the open positive positions Pyramiding the opened negative positions Pyramiding the opened positive positions other trailing stop is constructed stay within our portfolio risk parameters Pyramiding the open negative positions risk management Position Sizing Effects on Trader Performance Position Sizing Effects on Trader Position Sizing Effects close a trade with an unrealized loss risk management risk management manages trading profits manage trading losses manages those small losses manages trading losses adds units to an open position Highwatermark method High watermark method High water mark method determining the optimal exposure in a market robust trading methodology why money management is crucial to profitable trading  maintain constant volatility maintain constant risk How to maintain constant volatility How to maintain constant risk Trading systems have an inherent optimal heat Setting the optimal heat level optimal bet size two contract entry method contract entry method dramatically improving the performance of this trading system simple modification to the trading system simple modification of the trading system Position Size three contract entry method 3 contract entry method 1 contract entry method 2 contract entry method one contract entry method

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