Risk Management Rules you should follow in trading

Risk Management is one of the most important thing in trading. Because without risk management even if you have a good strategy you’ll still gonna end up losing money that’s why risk management is very crucial part of trading and you should not take it lightly.

Here are some risk management rules for traders who had recently entered the market –

1. Always treat new trade as new. Do not come to the market to recover your losses.
2. Only trade with the money you can afford to lose. Do not take loans or borrow money from people to trade because if you lose that money then there is no way you can return it to them and you will gonna end up in depression.
3. Beginner trader calculate their profit before enter the trade but pro trader calculate their loss before enter the trade if the stoploss is over his capacity then he will not take that trade.
4. Maintain a good Risk to Reward Ratio (R:R)
5. In You can use 1% rule or 2% rule to manage your risk means if you are using 1% rule then you will risk only 1% of your money in every trade.

I know you are thinking that this is less but believe me the first thing you need in the start of journey is these points and remember them. Because it will help you become a good trader.

Summary

Never come to the market to recover your losses.

Only trade with the money you can afford to lose.

First learn about yourself than learn the market.. (Age, Experience, Goals etc.)

First decide your max loss then your max profit.

Focus on your Risk to Reward Ration

For optimum Risk Mitigation use the 1% or 2% rule.