Risk and Exit Management System

Entry gets you into a trade. Risk management determines whether you stay in the game long enough to let your edge compound. Most momentum investors fail not from poor entry but from catastrophic loss on one or two positions that were not cut quickly enough.

Why This Matters

Minervini describes risk management as the most important dimension of trading — not stock selection, not market timing, not entry precision. The reason is mathematical: a 50% loss requires a 100% gain to recover. The Risk and Exit Management System ensures losses are small, gains are allowed to run, and no single position or market event can inflict irreversible portfolio damage.