If you want to use this formula in trading to maximize profit and risk management, a trader must know the probability of the method used. To find this out, you can perform a backtest.
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A simple example:
Capital $100
Risk/Trade 10%
If a loss occurs, the capital will decrease by $10 (10%)
Remaining capital $90
Therefore, in the next trade, Risk/trade becomes $9
dst,.
"If the probability of the method used is good, risk can be maximized so that the profit gained can be much faster and significantly larger, but the risk of a Margin Call is very small."