The essence of trading risk control
1. Reasonable planning of risk capital
Before trading, the first task is to clarify the total amount of funds and the risk you are willing to bear for each transaction. This needs to be based on your financial situation and off-site income ability. For example, if the total investment is 50,000 yuan and the monthly off-site income is 10,000 yuan, the monthly risk budget can be set at 2,000 yuan, which is 20% of the off-site income or 4% of the total funds. In this way, even if there are continuous disadvantages, the account can be ensured to be stable and will not affect subsequent operations. Professional traders need to be more cautious, and the risk of a single transaction should be controlled within 2%. If the monthly loss exceeds 10%, the transaction should be suspended and the strategy should be considered.
2. Clarify the profit and loss ratio
Trading is not a blind prediction, but a wise decision based on the profit and loss ratio. Each transaction requires careful planning of entry, exit, stop loss and take profit points, which is the essence of trading.
3. Follow the trend and stop profit flexibly
Trading is not a must-win battle, but a probability game. The key is to stick to the profit stop plan, which is the cornerstone of stable profit. The trend is from small to large, follow the trend, gradually reduce the position in the big trend, and let the profit run. The profit-taking target is 1:2, 1:3, and the position is adjusted flexibly. When the target is unclear, the position is reduced in proportion to ensure the profit.
4. Withdraw the principal in time and stay calm
When the profit accumulates, it is wise to withdraw part of the principal in time. The currency market is uninterrupted 24 hours a day. Although there are many opportunities, you need to respond calmly. When you are impulsive, you may wish to take a break and adjust your mentality.
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