⚠️ Essential Risk Management Techniques – For Active Traders 📉📈
💡 Why Risk Management Matters
Trading isn’t just about making profits it’s about surviving the storms of the market.
✅ Even profitable traders can blow up their entire accounts if they don’t manage risk properly.
🎯 The real goal? Avoid major losses!
🛑 Set Stop-Loss and 🎯 Take-Profit Points
Always decide in advance where you’ll stop a loss (Stop-Loss) and where you’ll take profit (Take-Profit).
❌ Avoid the “it’ll come back” mindset, or you might end up with heavy losses.
📊 Use both technical and fundamental analysis to define these levels effectively.
1️⃣ The 1% Rule
⚖️ A powerful principle: risk only 1% of your total account value on a single trade.
💼 For example, if your account has $10,000, don’t risk more than $100 per trade.
📉 Even during a losing streak, your account will stay safe.
⚖️ Balance Risk and Reward
Are you risking $1 to potentially earn $2 or more?
📉 If your win rate is below 50%, you can still be profitable if your risk/reward ratio is strong.
📦 Diversify and Hedge
💹 Spread your investments across various assets to absorb potential shocks.
🛡️ Use hedging tools like options and futures to protect against downward market movements.
🧠 Discipline and Consistency
Stick to your strategy — don’t let fear or greed override your rules.
😨 Emotions are a trader’s worst enemy, while 🎯 discipline is your greatest shield!
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