Although trading is one of the most profitable activities if you have decent capital, it can also bankrupt you if you don't measure your risks wisely and risk more than you should. A trader is successful because he keeps his losses to a minimum and not because he has no negative trades.
In fact, every trader fails in at least 3 out of 10 operations and it is because the markets (although they are cyclical) can be very unpredictable and susceptible to multiple factors, which is why it is so important to keep control of the percentage that you are willing to lose. In this opportunity, we will talk about three ways to trade safely and we will teach you how to maintain profitability through trading, regardless of the market you are operating.
It is imperative to have a healthy risk management or else you will end up burning all your accounts, no matter what strategy you are using. Suppose you risk 3% per trade to get a 6% reward, thus giving you a chance to fail 2 trades and recover the lost capital on a single successful position. Even if you are not yet an expert in technical analysis, you have the opportunity to fail multiple trades and still be able to make some profit with half of the trades that reach Take Profit.
The idea is to be able to have as many positive trades as possible, but if we maintain a winning risk management it will be very difficult to lose our money and that is what we are looking for. It is not about getting rich quickly but taking care of our capital.
When you have an open position and the price of the asset you are trading is running in your favor, make sure to change your stop loss level (which is initially at a certain loss percentage) and place it at a break-even level or even a minimum profit margin. In this way, even if there is an unforeseen event and the price turns against you, you will win or in the worst case you will not lose a penny. Thus, the number of negative trades you have will be considerably reduced and you will be able to take care of your capital wisely.
One of the most common problems among inexperienced traders is the feeling of greed and, seeing all the money they could be making with the little or a lot of capital they have, they decide to forget about their risk management and go all in with the highest leverage. available.
If you have considerably small capital and are making huge profits every day, it is only a matter of time before your account ends at 0. Leverage can be a double-edged sword if you use it irresponsibly, which is why traders should get used to it. just apply it in a healthy way and avoid losing more than we are willing to risk. Speaking of the three ways to trade safely, this is arguably one of the most important.
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