Trade of the week 2024: How disciplined risk management delivered a +31.45% return
IG's weekly trade ideas achieved 31.45% hypothetical gains in 2024, demonstrating the importance of careful position sizing and risk management.
Trade of the week: How disciplined risk management delivered strong returns since 2019
Trading success often depends more on risk management than win rate, as demonstrated by IG's ‘Trade of the week’ performance in 2024 and over the past six years.
Understanding the ‘Trade of the week’ concept
IG's Senior Technical Analyst Axel Rudolph 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 available through the IG website's ‘News and Trade Ideas’ section, the MyIG platform, and IG UK YouTube channel.
Each trade risks no more than 2% of a £10,000 demo account, plus spread costs.
Risk management principles in action
The strategy's success relies on strict 2% per-trade risk limits, preventing large drawdowns during losing streaks.
A July 2024 drawdown of four consecutive losses amounted to only 8%, requiring a 9% gain to recover.
Had the risk been 10% per trade instead of 2%, the same losing streak would have created a 40% drawdown, needing a 67% gain to get out of it.
This demonstrates why controlling risk per trade is crucial for long-term capital preservation.
2024 performance analysis
IG’s ‘Trade of the week’ 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 50 total trades, 21 were profitable and 20 unprofitable, with 9 breaking even after stop-loss adjustments.
2024 ‘Trade of the week’ monthly P&L stats
Eight months ended in profit, with four showing marginal gains and four recording losses.
Importantly the average winning trade (£362.84) was 1.62 times larger than the average loss (£223.72).
2024 ‘Trade of the week’ per trade return graph
Key success factors
Disciplined position sizing limited losses to approximately 2% per trade.
Stop-loss orders were moved to break-even when trades moved into profit by 2%, the initial risk of each trade setup.
The year’s trading strategy succeeded despite only being right about 50% of the time since the average winning trade made more money than the average losing trade lost. Always cutting losses at 2% but letting profits run, some to around a 10% gain per trade, led to larger average wins compared to losses. It is this that drove overall profitability.
Six years of hypothetical profits
The same risk and money management discipline has been applied since the inception of ‘Trade of the week’ in early 2019.
The average hypothetical yearly gain since 2019 comes in at around 19%, significantly beating the return of the FTSE 100, FTSE 250 and UK Gilts.
‘Trade of the week’ 2019-2024 yearly P&L graph
How to implement these principles
- Open a demo account to practice risk management
- Never risk more than 2% of trading capital per trade
- Use appropriate position sizing and stop-losses
- Follow the weekly trade ideas and learn from the analysis
- Keep detailed records of your trading performance
The results demonstrate that successful trading depends more on disciplined risk management than on picking winners, with the strategy consistently making positive yearly returns, even throughout the Covid-19 pandemic.
This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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