Risk vs Reward in Trading,, Manage Risk In Stock Market

Keep Calm and Manage Risk In Stock Market

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:

  1. 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.
  2. Your stress level will be manageable if each trade is only one of the next 100, with only 1% of your capital at risk.
  3. 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.
  4. 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.
  5. 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.

Also read

Stock Trading Basics

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