Risk and Money Management deals with limiting your exposure to losses as well as optimizing the number of shares you purchase to maximize potential gains.  

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One problem novice traders and investors have is betting too much money on one stock.  When that stock moves in your favor things work well and you are a genious.  When the stock moves against you, you take a bigger loss than you should.  If this happens too many times your trading capital will be wiped out.  

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Buying too small of a position in a stock is the other side of the coin.  You certainly minimize downside, but at the end of the day you haven't made enough money to move the needle in your account.  

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Luckily there are a few simple methods that can be used to limit your risk on any one trade as well as limit the risk to your overall portfolio.  To learn more Click