Hello everyone!👋
Risk management is a vital aspect for every trader. The mastery of this art is aimed to reduce the losses which are most definitely inevitable. Below are 4 tips to become better at risk management.
1. Set realistic goals📝
This should be the first step after funding your account. At this time, you have a clear vision of where you want the account to reach. Since losses are inevitable I recommend that you first put measures that will help you protect what you have and in this case, it's your capital rather than blindly chasing what you don't have. Most traders will focus on setting the profit target forgetting that the drawdown limit is of equal importance.
Additionally, set goals that are achievable within a certain timeframe to reduce the strain and the urge to over-risk in order to achieve them.
Seeing yourselves as more of a risk manager can have a positive impact on the growth of your account.
"True success is all about working towards meaningful goals and dreams"
2. Always Do the math 🧠
Trading involves a few calculations that are necessary before opening any position each time and also after the daily close.
Every trade should clearly show how much to lose and how much to win
Be aware of your earnings and losses because these are the results of your trade style and behavior.
3. Accept the risk🤝
A trader is more of a risk taker. Taking the risk means you are willing to put your capital on the line for the greater good. Before opening a position make sure to come to terms with how much you are willing to lose in case the trade goes against you. You should know better that without taking a risk then there is no pay.
I support the idea of self-talk.
I'm I okay with how much I can lose? How much impact will it have on my account? Is the risk manageable? If it's a No, then the risk is too much for you and you ought not to take the trade or you can choose to lower the risk
"Do not risk more than you can afford to lose"
4. Mitigate the risk ⌛
Did you know that you can be out of risk and still be in an open position?
With this technique, the aim is to reduce the risk and probably get in a zone I refer to as risk-free.
Do the following;
a. Move the stop loss above the entry if you are bullish and below if you are bearish - If you are in significant profits and there is a potential for a continuation of the trend then employ this technique because definitely you wanna be in the safe zone.
b. Take partial profits - You might be in profits but it's never yours if you don't take it
Generally, try and implement these tips in your next trades and I hope that you will receive positive growth. Please feel free to give me a thumbs up and add any additional information in the comment section below!
Have a great trading week ahead.
Risk management is a vital aspect for every trader. The mastery of this art is aimed to reduce the losses which are most definitely inevitable. Below are 4 tips to become better at risk management.
1. Set realistic goals📝
This should be the first step after funding your account. At this time, you have a clear vision of where you want the account to reach. Since losses are inevitable I recommend that you first put measures that will help you protect what you have and in this case, it's your capital rather than blindly chasing what you don't have. Most traders will focus on setting the profit target forgetting that the drawdown limit is of equal importance.
Additionally, set goals that are achievable within a certain timeframe to reduce the strain and the urge to over-risk in order to achieve them.
Seeing yourselves as more of a risk manager can have a positive impact on the growth of your account.
"True success is all about working towards meaningful goals and dreams"
2. Always Do the math 🧠
Trading involves a few calculations that are necessary before opening any position each time and also after the daily close.
Every trade should clearly show how much to lose and how much to win
Be aware of your earnings and losses because these are the results of your trade style and behavior.
3. Accept the risk🤝
A trader is more of a risk taker. Taking the risk means you are willing to put your capital on the line for the greater good. Before opening a position make sure to come to terms with how much you are willing to lose in case the trade goes against you. You should know better that without taking a risk then there is no pay.
I support the idea of self-talk.
I'm I okay with how much I can lose? How much impact will it have on my account? Is the risk manageable? If it's a No, then the risk is too much for you and you ought not to take the trade or you can choose to lower the risk
"Do not risk more than you can afford to lose"
4. Mitigate the risk ⌛
Did you know that you can be out of risk and still be in an open position?
With this technique, the aim is to reduce the risk and probably get in a zone I refer to as risk-free.
Do the following;
a. Move the stop loss above the entry if you are bullish and below if you are bearish - If you are in significant profits and there is a potential for a continuation of the trend then employ this technique because definitely you wanna be in the safe zone.
b. Take partial profits - You might be in profits but it's never yours if you don't take it
Generally, try and implement these tips in your next trades and I hope that you will receive positive growth. Please feel free to give me a thumbs up and add any additional information in the comment section below!
Have a great trading week ahead.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.