What is trading risk management
First of all, if you are a Stud player or European Emperor, this article is not valid for you, because you are the chosen one, a warrior who works miracles with great strength, and a passionate warrior. Risk management does not belong to you, but long-term traders need to have the ability to manage funds.
Why Uncle Ai wrote this article is also based on the recent discovery that many group members rely on their passion to place orders in the direction I think, rolling positions at high positions and mercilessly cutting at low positions.
1. What is a risk plan?
Before trading, first check how much capital you have? How much risk are you willing to take on each trade? This needs to be planned in advance. The proportion of risk you take generally depends on your capital and your ability to make money off the market. For example, if your investment is 50,000, and your off-site income is 10,000 per month, then the monthly risk plan is no more than 2,000, which accounts for less than 20% of the off-site income and 4% of the total funds. This can ensure that if you are particularly unlucky and make consecutive wrong orders, the loss in your account will not affect the follow-up. For professional traders, the risk of each transaction should be controlled within 2%, and the trading loss for the month should not exceed 10%. If it exceeds, force yourself to take a rest and think carefully about the operations of the month.