#Liquidity101

The Power of Risk Management:

Effective risk management is the bedrock of sustainable trading. Never risk more than a small percentage of your capital on any single trade, typically 1-2%. This prevents a few bad trades from wiping out your account. Always use stop-loss orders to limit potential losses and define your maximum acceptable drawdown. Understand the concept of "position sizing" – adjusting the size of your trade based on your risk tolerance and the volatility of the asset. Protecting your capital is always the first priority; profits will follow once your risk is controlled.