You can follow your trading strategies perfectly, but if you don’t manage risk well, you won’t be profitable.
Here’s how to master risk management with 5 lessons from Linda Raschke🧵:
Risk Only What You Can Afford to Lose
“Never risk more than 1-2% of your trading capital on a single trade.”
• Define your risk tolerance
• Control your position sizes
• Protect your capital
Use Stop Loss Orders
“Always know where you’re getting out before you get in.”
• Set stop-loss orders for every trade
• Stick to your exit strategy
• Limit potential losses
Learn from Your Mistakes
“Every loss is a lesson.”
• Analyze your losing trades
• Identify what went wrong
• Use insights to improve
Diversify Your Trades
“Don’t put all your eggs in one basket.”
• Spread trades across different assets
• Reduce overall risk
• Balance your portfolio
Manage Your Emotions
“Keep emotions out of your trading decisions.”
• Avoid trading based on fear or greed
• Maintain emotional discipline
• Make rational decisions
To learn more about How you can Start Trading for a living, sign up below for my Free Training on the “7-Steps to Financial Freedom through Trading”.
