First:#Risk_Management/ It means that you do not only focus on making profits, but you also plan.
This includes determining how much money you can afford to lose on one trade, avoiding putting all your capital into one trade or entering into random trades.
Second: The most important elements of risk management:
1. Determine the risk size for each trade:
Do not risk more than 1-2% of your capital on a single trade.
Example: If you have $10, your maximum possible loss on any trade should be only $0.0002-0.0003.
2. Determine Stop Loss:
It is the price level you set in advance to exit the trade if you start losing.
Example: If you are trading a currency that is currently worth $1 and you expected it to rise, but the price starts to fall, you can set a stop loss at 0.08 to protect your capital.
3. Avoid excessive leverage:
Leverage allows you to trade with larger amounts than your capital, but it increases your risk significantly. Choose a lower leverage such as 1:10 instead of 1:100.
4. Diversify deals:
Don't put all your money in one#tradeor one type of asset.
Example: Instead of investing in one currency pair like $BTC /USD, spread your investments across different currency pairs.
5. Trade wisely and do not be greedy:
Set daily or weekly profit and loss goals.
Stop trading if you reach it.
Example: If you make $1 in one day, stop trading to avoid losing later.
6. Market Analysis:
Don't enter into random trades. Analyze the market using technical and fundamental analysis tools to identify potential trends.
7. Managing emotions:
Avoid trading under the influence of greed or fear, as these emotions lead to making wrong decisions.
