💭 How to use capital management to protect your profits and reduce your losses?
📌 The real secret behind professional traders staying in the market is not the number of their winning trades, but how they professionally manage their capital.
1. Do not risk more than 1-2% of your capital on a single trade
This golden rule protects you from consecutive losses and gives you a chance to recover later.
2. Always set a Stop Loss
Entering without a Stop Loss is like driving without brakes. Set in advance when to exit the trade to prevent losses from multiplying.
3. Use the Risk-Reward Ratio (R:R)
Target trades at a ratio of 1:2 or more, meaning do not enter a trade unless the expected profit is double the potential loss.
4. Divide your capital into multiple opportunities
Do not put all your money into one trade. Spread the capital over smaller trades for higher flexibility and better control.
5. Monitor your emotions after winning and losing
The biggest risk after a winning trade is overconfidence, and after a loss is seeking revenge on the market. Money management includes self-management.
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How to choose the right times to trade and avoid trap hours?
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