The secret to success in trading is not how much you earn, but how much you save. Trading without risk management is just gambling! 🎰🚫
📏 What is the 1% Rule? 🛡️
Professional traders never risk more than 1% of their total capital in a single trade. 🛡️ If you have $1,000, your loss should only be $10. The formula is:
Position Size = \frac{Account Balance \times Risk \%}{Stop Loss Pips \times Pip Value}
🛑 Stop Loss (SL) and Take Profit (TP) 🎯
🛑 Stop Loss: This is an automatic order that keeps your losses in check. 🛑
🎯 Take Profit: The level at which you lock in profit when your target is achieved. 💰
📊 Correct Use of Indicators ⚙️
📈 Moving Averages (MA): These indicate the trend. Price above the MA means the trend is bullish!
📉 RSI (Relative Strength Index): RSI above 70 means "Overbought" (sell 🔴), below 30 means "Oversold" (buy 🟢).