Risk management is the most important and misunderstood topic in Investment.

This topic will talk about how to effectively manage risk and avoid significant losses.

𝟭. Stop loss

Stop losses are designed to limit an investor's loss on a position that creates an unfavorable move.

One major advantage of using a stop loss order is that you don't need to monitor your trades every day.

Stop loss must be based on good and potential support/resistance levels

Stop loss must be set at the breakout zone of the trend

This is the price at which your analysis was wrong. If you are wrong, you must accept it and cut your losses, don't be stubborn

𝟮. Using excessive leverage

The most common group I see using high leverage is NEW and inexperienced Investors.

Avoid unless you have many years of experience and a high success rate. Otherwise, it's gambling.

𝟯. Exit orders at the right time

Knowing when to exit is as important as knowing when to enter.

Keeping a winning position open to accumulate profits can lead to a market reversal that wipes out all profits.

If the profit reaches Tp1 level, raise the sl to the breakeven price or close it if you see the market is over the top. Don't be too greedy and ignore technical analysis to evaluate the market.

𝟰. Avoid opening too many transactions

NEW investors also often open too many trades.

They fear that they will miss out on opportunities if they do not regularly participate in the market.

In fact, you should stand on the sidelines more often and wait for the perfect moment to open a trade.

𝟱. Don't expect too much

People who do this experience a surge of emotions. For most traders, this number is a sign of success.

As long as you have set your stop loss and followed the trading rules, you will be protected.

𝟲. Trust PTKT.

People like George Soros don't become the Biggest Investors by accident. They have developed strong technical analysis skills after years of study.

Understanding the market from a technical perspective will help you minimize risks.

𝟳. Trade within tolerance

If you lose sleep at night over your large position size, then you are likely overinvested.

It's best to avoid ALL IN running out of investment capital unless the market is extremely undervalued.

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