Why Do People Make Loss in Trading?
Just to know what do you think of trading? If you think it's full of loss-making then you are in the wrong place. People often focus on how much percentage to make or how could they double their capital this is what trading means to 95 % of people. Everyone thinks you have to make a fancy chart like this in order to trade
No its not that Trading is a game full of probability, risk management, and mindset. 80% is mindset and 20% is technical analysis Now you might be thinking what shit is this guy talking just think when you are sprinting 100 m do you require different tools like food, energy drinks, calorie counter, etc no you just concentrate to keep yourself light and free so that you can give your max efforts.same is with trading you have to make money in a day or so.
Secondly people s focus on returns and not Risk Management you should always focus on Risk to Reward that is the main motto behind this article that is how much you are ready to risk in order to get that return (you should always trade those positions where Risk to Reward is more than 1:2) that is if Risk to Reward is 1:2 means you are ready to risk 1Rs in order to gain 2 Rs. The better you manage your risk the lesser you make losses.
Thirdly Always put Stop losses on basis of Risk to Reward I have given an example below(RTR 1:2) this way I curtail my losses
Lastly, you must not have greed you must always focus on Risk Management and stop losses if you follow this itself you get a head start . Now if you see the chance of winning a trade is 50% when you combine these techniques the chances of winning are about 60-70% see how just by learning this I prevent my capital from drawdown as well as have a high probability to win So to revise Risk Management is the highest priority Always keep Stop Loss(Successful Traders aways keep this) Never use too many indicators Be Positive Happy Trading Do give an upvote and comment if you have any doubt