Describes the inner workings of the TS Risk Stability Badge - a very important badge within the Tradeslide Challenge

1. Rs Badge
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2. Why is stable risk (Rs element) investable?
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If you trade to manage investor capital, two risk appetites come into play
• Yours – as defined by how you manage your own capital
• Your investors – for their investment in your trading
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Investors expect risk at any time to match expected risk when they invested –
and will monitor any deviations very closely
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Deviations in risk – particularly sudden ones – will make investors lose
confidence in your risk management, and trigger capital calls
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This is the reason why stable risk matters
• The level of risk DOES NOT matter
• Ideally, risk should stay constant
• If risk changes, change should take place as slowly as possible over
time, allowing investors to re-adjust their leverage levels with respect to
you
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3. INDEX
1. UNDERSTANDING RS
2. IMPROVING ON RS
3. QUESTIONS?
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4. Rs - Risk stability – What is it?
We track worst potential loss in a strategy over time
Risk stability is the difference between max and min potential loss
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A VERY IMPORTANT badge at the TS Challenge, it has an important
weight in the TS Score
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Stable Risk = Predictable Risk = Investable Risk (if it delivers returns :-)
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Designed to re-assure investors that risk is managed to a PREDICTABLE level
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5. Rs – An example for stable risk
Maximum risk in last month
Risk in this specific date
Minimum risk in last month
A Difference > 1 will penalize your Risk Stability
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6. Rs – An example for unstable risk
Wouldn’t this
make you
nervous?
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7. INDEX
1. UNDERSTANDING RS
2. IMPROVING ON RS
3. QUESTIONS?
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8. Rs – How to improve?
Can investors trust that a strategy won’t overstep their risk appetite?
If they don’t trust, they won’t invest
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Consider trade duration, market and asset volatility in leverage decisions
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Improvements to leverage consistency (Lc) will likely improve risk stability
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Experiment with the effects of your leverage decisions on your risk profile
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Use our Risk Manager for free to improve your Lc and Rs badges
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9. INDEX
1. UNDERSTANDING RS
2. IMPROVING ON RS
3. QUESTIONS?
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10. Questions?
Trading is hard – no wonder there are unanswered questions!
(Why not, together, build a Knowledge Base that answers them all?)
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The Knowledge Base contains TS Mentors’
answers to all your questions!
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Mentors are Traders like you who
enjoy helping out, and are voted
very good at it, AND
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Trading educators hand-picked for
quality and broker independence,
who pitch their materials
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Want to contribute? Great!
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Post an article / Post
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Ask or answer questions
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Rate fellow traders’ contributions
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11. Can you do better?
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This article is a “stub” (an unfinished entry that MUST be improved)
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We need your questions & feedback to improve it!
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Feel free to post your questions to the TS Knowledge Base
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Have suggestions?
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theowl@tradeslide.com can’t wait to hear them
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We’d love to credit you for improving our content
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Contributing to this section will boost your mentor score if others like what you post –
helping out will reflect on your community standing, which means
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More traders will visit the URL on your profile
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When they visit, they’ll request your mentoring!
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