#HODLTradingStrategy Here's a breakdown of the rule:

3% Rule:

This limits the amount you can lose on a single trade. For example, if you have $10,000 to invest, you would not risk more than $300 on any single trade.

5% Rule:

This limits your total exposure to the market. If you have $10,000, you would avoid having more than $500 invested in total across all open positions.

7% Rule:

This sets a profit target for each trade. If you risk $300 on a trade, you would aim to make at least $21 in profit.

Why is it important?

Risk Management:

The 3-5-7 rule helps protect your capital by limiting potential losses on any single trade and across all trades.

Disciplined Trading:

It encourages traders to think strategically about risk and reward, promoting patience with profitable trades and decisive action on losing ones.

Potential for Profitability:

By aiming for a higher profit target than the potential loss, the rule can contribute to overall profitability over time, assuming you are successful in meeting your profit goals.

In essence, the 3-5-7 rule provides a framework for traders to manage their risk effectively, stay disciplined, and potentially improve their trading outcomes.