I used to make trades just because I had a feeling "it would go up", without considering the risk/reward ratio. After a few account blowouts, I started applying the Risk/Reward Ratio rule – at least 1:2. That is, if I accept the risk of losing $10, then the potential profit must be $20 or more. This helps me select trades more carefully, no longer entering trades randomly. Trading is not gambling, but a probability problem. Better risk management allows the account to survive and grow.
