Risk Management in Trading

Successful trading is as much about risk management as it is about making profits. One of the fundamental rules is never to risk more than 1-2% of your trading capital on a single trade. This strategy minimizes potential losses and prolongs your trading career.

Implementing stop-loss orders is another crucial component; it automatically closes your position at a predetermined price, protecting you from significant downturns. Regularly reviewing and updating your risk management plan based on your growth and market changes is equally important.

Remember to diversify your portfolio to reduce the impact of poor-performing assets on your overall capital. A well-structured risk management approach not only protects your investments but also boosts your confidence in making trades.