Manage risk in Stock Market : While trading risking only 1% of total trading capital per trade should solve the following five issues that traders face:
- If you only risk 1% of your trading capital per trade, you will not experience more than a 10% drawdown with 10 consecutive losses. If your trading system is solid, you are unlikely to lose more than ten times in a row.
- Your stress level will be manageable if each trade is only one of the next 100, with only 1% of your capital at risk.
- If the loss is only 1% of your capital, your ego will be manageable. It will, in turn, lessen your desire to be right at all costs.
- When trades are 1% of trading capital with the proper position sizing and stop loss, you are more likely to remain emotionless about your trades.
- With only 1% of your trading capital at risk, you will become a better time manager because you will not need to monitor every tick of your position.
You Should Always Manage Risk In Stock Market While Trading. Always try to risk 1% of your trading capital.