Managing Financial Risks

There are several reasons why a strategy or a trade setup may be unsuccessful. For eg. a trader can lose money because the market moves against their futures contract position or because they get emotional and end up selling out of panic.

🍀Emotional reactions often cause traders to ignore or give up their initial strategy. This is particularly noticeable during bear markets and periods of capitulation.

🍀In financial markets, most people agree that having a proper risk management strategy contributes drastically to their success. In practice, this could be as simple as setting Stop-Loss or Take-Profit orders.

🍀A robust trading strategy should provide a clear set of possible actions, meaning that traders can be more prepared to deal with all sorts of situations. As mentioned, though, there are numerous ways of managing risks. Ideally, the strategies should be revised and adapted continuously.

$BNB $SOL $BTC