🥇 Money Management Basics for Traders
One of the main paradoxes of trading is that most people lose not because they don't know how to analyze the market, but because they don't know how to manage their capital.
Here is a step-by-step instruction that everyone should know:
1️⃣ Calculate in % of risk, not money
It does not matter how big your deposit is. What matters is how much percent of it you are willing to lose if a trade goes against you. The optimal risk is 1-2% per trade.
2️⃣ Trade with a clear stop loss
Every trade should have:
- Entry
- SL (level where you exit with a loss)
- TP (target)
No stop = it's not a trade, it's a lottery.
3️⃣ Do not increase or decrease your risk after a loss
Many people think: “I'll get back in”. But after a loss, increasing the volume is a direct way to drain your deposit. Keep the same risk on each trade, regardless of the result of the previous one.
4️⃣ Trade for the long term
One trade is not an indicator. Only a series of trades can show the effectiveness of strategy
One of the main paradoxes of trading is that most people lose not because they don't know how to analyze the market, but because they don't know how to manage their capital.
Here is a step-by-step instruction that everyone should know:
1️⃣ Calculate in % of risk, not money
It does not matter how big your deposit is. What matters is how much percent of it you are willing to lose if a trade goes against you. The optimal risk is 1-2% per trade.
2️⃣ Trade with a clear stop loss
Every trade should have:
- Entry
- SL (level where you exit with a loss)
- TP (target)
No stop = it's not a trade, it's a lottery.
3️⃣ Do not increase or decrease your risk after a loss
Many people think: “I'll get back in”. But after a loss, increasing the volume is a direct way to drain your deposit. Keep the same risk on each trade, regardless of the result of the previous one.
4️⃣ Trade for the long term
One trade is not an indicator. Only a series of trades can show the effectiveness of strategy