What are the details of capital management strategy?
Capital management strategy is considered the cornerstone of any successful trader, as it helps you reduce losses and increase profit opportunities in the long term. Let me clarify it in a simplified and organized way:
1. Determine the risk percentage
Do not risk more than 1-5% of your capital in each trade. For example: If you have $1000, do not risk more than $50 on one trade.
2. Calculate the trade size
Use the formula: Trade size = Capital × Risk percentage ÷ (Risk per trade in points) This helps you determine how many units to enter based on price movement.
3. Set a stop loss
Always use a clear stop loss based on technical analysis and not randomly.
Do not move it during trading unless it is in your favor and you want to secure the profit.
4. Take profits logically
Do not be greedy! Set an exit point when you achieve your goal, and if the market continues to rise, you can enter again with a new plan.
5. Diversify your investment portfolio
Do not put all your capital in one digital asset. Spread the risk among reliable currencies and projects.
6. Continuously evaluate performance
Review your trades weekly or monthly, learn from mistakes, and develop your strategy.
