P1: PIC/b P2: c/d QC: e/f T1: g
c08 JWBK182-McDowell April 25, 2008 16:4 Printer: Yet to come
Scaling Out and Scaling In 71carefully calculating trade size, we cannot controlmarket risk. Trade risk
is the risk we assume based on set stop-losses and proper trade size. Mar-
ket risk is unforeseen events that cause market gaps and bad stop-loss fills
that can offset the predetermined trade risk we planned for. Because of
market risk, always trade with risk capital, and be careful of your overall
portfolio risk.