All traders must predetermine their risk prior to entering any position. For new traders, blowing up an account is not a necessary step in the process to becoming profitable. Avoiding sizing too large and practicing strict stop losses goes a long way with protecting capital
Position Size - Part 1
While everyone is willing to put out a different amount of financial risk when entering a position, a basic rule to follow is only putting 1 to 3 percent of account at risk per trade (varies based on account size)
While everyone is willing to put out a different amount of financial risk when entering a position, a basic rule to follow is only putting 1 to 3 percent of account at risk per trade (varies based on account size)
Position Size - Part 2
Depending on what works best for your trading style, you can manipulate your position size and stop loss while risking the same amount. Reducing position size increases room for error, while being sized in larger will require a more accurate entry
Depending on what works best for your trading style, you can manipulate your position size and stop loss while risking the same amount. Reducing position size increases room for error, while being sized in larger will require a more accurate entry
For New Traders
Start on a cash account with a small amount of money you are willing to lose, but will be eager to protect. If you canβt make profit with $1,000, increasing your capital will not make it any easier. Take time to learn and avoid looking like the person below
Start on a cash account with a small amount of money you are willing to lose, but will be eager to protect. If you canβt make profit with $1,000, increasing your capital will not make it any easier. Take time to learn and avoid looking like the person below
Paper Trading π β π΅
Trading on a paper account (fake money) can sometimes be useful when learning to backtest new strategies, but can be damaging if relied on too heavily. Trading without real money will remove emotions and give false confidence to what true trading really is
Trading on a paper account (fake money) can sometimes be useful when learning to backtest new strategies, but can be damaging if relied on too heavily. Trading without real money will remove emotions and give false confidence to what true trading really is
Establishing Rules
Creating and following rules is one step to take in order to hold yourself accountable when trading and to keep emotions in check. Strictly relying on set rules will not only prevent making irrational decisions, but will result in more consistent trading
Creating and following rules is one step to take in order to hold yourself accountable when trading and to keep emotions in check. Strictly relying on set rules will not only prevent making irrational decisions, but will result in more consistent trading
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