Trading success often hinges more on risk management than on win rate, as demonstrated by IG’s ‘Trade of the Week’ (TOTW) performance in 2024 and over the past six years.
Understanding the ‘Trade of the week’ concept
IG Senior Technical Analyst Axel Rudolph, Fellow of the Society of Technical Analysts (FSTA), provides weekly hypothetical trade setups every Monday morning in his ‘Talking Technicals’ TV slot on ‘Trade Live with IG’, starting on Monday 6 January 2025.
These educational trade ideas demonstrate proper position sizing, stop-loss placement, and risk management techniques. The trade ideas are accessible via IG’s website (‘News and Trade Ideas’ section), MyIG platform, and IG UK YouTube channel.
Risk management principles in action
The success of TOTW is built on enforcing a strict 2% risk limit per trade, preventing large drawdowns.
In July 2024, four consecutive losses resulted in only an 8% drawdown, which required a 9% gain to recover. If the risk per trade had been 10%, it would have required a 67% recovery gain, underscoring the crucial importance of risk control.
2024 performance analysis
IG’s TOTW setups achieved strong monthly gains of approximately 11% to 12% in January, June, and November, compared to the worst monthly loss of 6.32% in July 2024.
Out of the 50 total trades, 21 were profitable, 20 were unprofitable, and 9 broke even after stop-loss adjustments.