Core Principles of Risk Management:

• Never risk more than 1-2% of your capital on any single trade

• Calculate position size:

Position Size = (Account Risk %) / (Entry Price - Stop Loss)

• Always set stop losses BEFORE entering a trade

• Use trailing stops to protect profits

• Minimum Risk-Reward Ratio should be 1:2

👉 For Example: Risk $100 to make $200+

Avoid trades where potential reward doesn't justify risk

Trade Execution Process :

  • 1. Entry: Enter only when all conditions are met

  • 2. Stop Loss: Immediately place stop order

  • 3. Take Profit: Set at minimum 1:2 R:R ratio

  • 4. Manage: Adjust only stop loss (to lock profits)

Common Mistakes to Avoid

  • ❌ Overtrading - Quality over quantity

  • ❌ Moving stops further away - Accept when wrong

  • ❌ Averaging down losing positions - This isn't investing

  • ❌ Trading without a clear plan - "Winging it" fails

  • ❌ Letting emotions drive decisions - Stick to your rules

🎯 The Bottom Line

Trading success isn't about being right all the time—it's about managing risk so you survive your losing trades and compound your winning ones.

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