🎯 Trading is not just a game leaning heavily towards trading methods but is a combination of 3 things:
1️⃣ Capital management
2️⃣ Trading method
3️⃣ Trading psychology
🚦🚦 Before entering an order you need to determine 3 factors:
+, Determine the amount of money you can lose in an order (1-2% of total Trading account)
+, There is Entry, Stop loss, Take profit
+, Calculate volume to enter the order.
💖 Example: I have capital of $5000.
Identify 3 factors:
Case 1.
1. Risk cut loss 1 order $50 (1% account=1R )
2. Long BTC
Entry 10000
Stoploss 1%
Leverage x100
3. Calculate Volume to enter the order:
Volume = (R/percentage % Stoploss) x 100= (50$/1) x 100= 5000$
So when you hit Stoploss you will lose 50$ (1R)
Case 2:
1. Risk cut loss 1 order $50 (1% account=1R )
2. Long BTC
Entry 10000
Stoploss 3%
Leverage x100
3. Calculate Volume to enter the order
Volume = (R/percentage % Stoploss) x 100= (50$/3) x 100= 1666.67$
So when you hit Stoploss you will lose 50$ (1R)
Case 3:
1. Risk cut loss 1 order $50 (1% account=1R )
2. Long BTC
Entry 10000
Stoploss 1%
Leverage x50
3. Calculate Volume to enter the order
Volume = (R/percentage % Stoploss) x 100= (50$/1) x 100= 5000$
So when you hit Stoploss you will lose 50$ (1R)
💨 Through the 3 examples above, we see that Leverage is not really important when trading. Because leverage does not exist in the calculation formula for volume like this.
Similar to example 1 and example 3, the only difference is in leverage x100 and x50. But the Volume remains 5000$ and when hitting Stoploss, you lose 50$.
Unless you want to bet big (exceed account risk) then you need high leverage
🔥 Don't enter an order without managing capital, blowing an account is only a matter of time. 🔥
#MarketDownturn #BTC☀
