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The Trading Mistake 99% of People Make (Tom Basso's Secret Profitable Trading System)

The TraderLion Podcast

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Risk Management Strategies and Portfolio Diversification in Trading

One key aspect of risk management strategies in trading is having a clear timing indicator to set the risk and determine entry and exit points. Using a fixed risk approach like setting stop loss points based on specific indicators can help in sizing positions effectively. It's important to have crystal clear entry and exit points to avoid making impulsive decisions. Additionally, extreme diversification by selecting assets that are non-correlated can spread the risk effectively and prevent any single asset from significantly impacting the portfolio. Achieving a portfolio with non-correlated assets is crucial for true diversification and for smoothing out the overall portfolio performance.

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