[EDU] Lossing How much is too Much? (Risk Management)

24 Oca

Hello fellow traders , my regular and new friends!
Welcome and thanks for dropping by my post.

A picture speaks a 1000 words and that is so true!
Recently I came across this picture from moo moo.
It actually strike a chord with the message that I always wanted to bring across, which is the importance of risk management!
Always keep in mind that having your trade size manageable such that is wont devastate your trading account is very important.
So let's say you are trading between 1-2% risk per trade, if you are so unlucky to have 10 straight losses, you will be down with a drawdown of 10-20%, as shown in the picture you will need almost equal % of profit to get back your losses.
But, what if you were to trade with 4 or 5% risk per trade? With that,10 straight losses will get you a drawdown of 40-50%! And as you can see the gains you need to recoup these losses will be 67 to 100%. It is not hard to imagine what will happen if you are risky 10 or 20% risk per trade.
So anything can happen in trading and it is always wise to protect your downside!

Trade Safe!

Do check out my stream video for the week to have more explanation in place.
Do Like and Boost if you have learnt something and enjoyed the content, thank you!

-- Get the right tools and an experienced Guide, you WILL navigate your way out of this "Dangerous Jungle"! --

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Disclaimers:
The analysis shared through this channel are purely for educational and entertainment purposes only. They are by no means professional advice for individual/s to enter trades for investment or trading purposes.
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