Why you loss too much and win small profit

Many traders focus on finding the perfect entry, but professional traders focus on risk management first.

Before entering any trade, decide how much you are willing to lose. A common rule is to risk only 1% of your trading account per trade. This helps protect your capital during losing streaks.

Next, use a favorable risk-to-reward ratio. For example, if you risk $100, aim to make at least $300. This creates a 1:3 risk-to-reward ratio. With proper risk management, you can still be profitable even if only a portion of your trades are winners.

Remember: Position size controls your risk, and risk-to-reward ratio controls your profitability. Master these two skills, and your trading results can improve significantly over time.

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