Thinking of entering the market now? Don’t rush to ask what to buy.
Do the math first: if you’re willing to lose at most 100 yuan and plan to set your stop-loss 5% away, your position should be capped at around 2,000 yuan, excluding fees and slippage—not your entire principal.
Leave some room for fees and slippage, too; in extreme market conditions, your stop-loss could still result in a larger loss. Don’t touch money you need for living expenses, and beginners shouldn’t use leverage to boost their confidence. Decide how much you can afford to lose before thinking about how much you could make. #TradingRiskManagement
Do the math first: if you’re willing to lose at most 100 yuan and plan to set your stop-loss 5% away, your position should be capped at around 2,000 yuan, excluding fees and slippage—not your entire principal.
Leave some room for fees and slippage, too; in extreme market conditions, your stop-loss could still result in a larger loss. Don’t touch money you need for living expenses, and beginners shouldn’t use leverage to boost their confidence. Decide how much you can afford to lose before thinking about how much you could make. #TradingRiskManagement