Margin Trading 101: 3 Rules to Avoid Liquidation
Margin trading is a double-edged sword. It can multiply your profits in an instant, but it can also wipe out your margin if you make the wrong move. Many beginners get trapped by emotion, not strategy.
Based on my experience in the market, here are 3 golden rules to keep your portfolio safe:
Smart Position Sizing: Never use 100% of your margin in a single position. Stick to a maximum of 5–10% of your total capital per position. Keep your account "healthy" so you have breathing room if the market suddenly reverses.
Stop Loss is Non-Negotiable: Never enter a trade without a Stop Loss (SL). If your SL is hit, accept it as an operational cost. It is far better to take a small loss than to lose your entire capital while "waiting" for the price to recover.
Don't Fight the Trend: Trading with the trend (trend following) is much safer than trying to catch "falling knives" or gambling on calling the exact top of the market.
Remember: Great traders aren't those who make one massive profit; they are those who stay in the game for the long haul. Consistency is the key.
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