It is the method that protects your capital from large losses by:
Calculating risk in each trade
Determining the correct lot size
Using Stop Loss
Controlling emotions during trading
---
๐น The difference between money management and risk management
Money Management:
Focuses on the best use of capital in each trade (lot size, percentage for each trade).
Risk Management:
Includes everything: position size, diversification, risk reduction after a series of losses, liquidity monitoring, risk reduction during news events.
---
๐ Types of fundamental risks
Market risks: price movements due to news and geopolitical events.
Leverage risks: profits and losses are magnified with leverage.
Liquidity risks: some assets are hard to sell or buy quickly.
Interest rate risks: central bank decisions change direction suddenly.
Political risks: crises or government changes.
Bankruptcy risks: capital depletion due to consecutive losses.
---
๐ How to calculate the position size (the golden equation)
Trading volume = risk capital รท (price movement ร point value per lot)
๐ก Example:
Your account balance = 10,000 dollars
Risk ratio = 5% (which means $500 per trade)
Stop loss = 80 points
Point value = $10 per lot
Size = 500 รท (80 ร 10) = 0.625 lots
(which means you enter with 0.62 lots or less)
---
โ ๏ธ Golden tips for applying risk management:
โ Do not risk more than 1-2% of your capital on a single trade (especially as a beginner).
โ Always use stop-loss orders.
โ Do not over-leverage regardless of market conditions.
โ Test the strategy on a demo account before going live.
โ Reduce lot size after a series of consecutive losses.
โ Diversify across different assets to reduce risks.
---
๐ Summary:
Even if your analysis is right 100%โฆ
Without risk management, you won't be able to maintain your account.
Even if your analysis is wrong 50%โฆ
With strict risk management, you can achieve profits in the long run. ๐ฏ
๐ฅ #ุฅุฏุงุฑุฉ_ุงูู ุฎุงุทุฑ
๐ฅ #ุณุฑ_ุงููุฌุงุญ_ูู_ุงูุชุฏุงูู
๐ฅ #ุงูููุช_ุงูู ูุงุณุจ
๐ฅ #ุงูุชุฏุงูู_ูู_ุงูุฅุฏุงุฑุฉ
