Many focus only on buy/sell signals, but risk management is what defines the difference between winning consistently... or losing it all.
💡 What is risk management?
It is the set of rules that allows you to protect your capital, even if several trades fail. In trading, losing is part of the game; the important thing is to lose little and gain more when you are right.
📏 Key principles:
1. Position Size
Never risk more than 1% to 2% of your capital on a single trade. This gives you room to make many mistakes without going broke.
2. Stop Loss and Take Profit
Stop Loss: cuts losses automatically.
Take Profit: secures profits at target levels.
Never trade without setting these levels, especially in futures.
3. Risk/Reward Ratio (RRR)
Ensure that each trade has at least a 1:2 ratio, meaning you can win double what you are willing to lose.
4. Emotional control
Avoid revenge against the market. If you fail several times, take a break and review your strategy. Do not overtrade out of frustration.
