WHY YOU SHOULD TAKE PROFIT AT 20-25 AND CUT LOSS AT 7-8%
To make money in the market is to protect the money you have. And these are the first 2 rules that will give you a profit/risk ratio of approximately 3:1, with a profit of 20-25% compared to a loss of 7-8%.
If you follow this selling rule, you can be wrong on 2 out of 3 trades without any serious problems (maybe just a small loss).
Example: Use a 3:1 Risk/Reward Ratio to Protect and Grow Your Portfolio
1️⃣ Investment amount #1: 5000 USD, but you lose 7%, your loss is now 350 USD, your total assets left in the first transaction are 4,650 USD
2️⃣ Investment amount # 2: 4,650 USD, you continue to lose 7%, your loss is now 326 USD, your total assets are l
3️⃣ Investment amount # 3: 5,813 USD, you continue to profit +25%, your profit is now 1,453 USD, your total assets left are 7,266 USD.
4️⃣ Investment amount #4: 7,266 USD, you lose -7%, the loss is now 509 USD, your total assets are now 6,757 USD.
5️⃣ Investment amount #5: 6,757 USD, you gain +25%, the profit is now 1,689 USD, your total assets are now 8,446 USD.
Summary of your 5 trading deals: you bring in a profit of 69%, this is the power of Compound Profit and Minimizing Losses.
When you do this, you can enter the market with confidence, because you understand that you have been protected from too much risk while building a solid foundation for compound profit.
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