Risk Awareness
Use only funds that you can afford to lose when trading.
1. Affordability & Logic
The first rule of trading is to only risk money you can afford to lose. If trading were like a casino, you wouldn't bet your entire life savings on one round.
Don't waste funds you depend on for survival. Using your own money puts strain and emotional stress on your judgment.
2. Stop-Loss Strategy
In the event that the market moves against you, stop-loss orders are essential to prevent further loss.
Evaluate Risk Tolerance: Before trading, determine your tolerance based on your knowledge, experience, and investing goals.
Risk Warning
We are here to safeguard you against these threats by promoting responsible trading habits.
Maintain a Stable Risk Level
Avoid the extremes of being risk-averse or overconfident.
Just because you've had a few successful deals doesn't mean your next one will be too. Avoid overconfidence, as it leads to arbitrary changes in your money management plans. Stick to the rules you set for calculating your holdings.
The Bottom Line
- Research: Use beginner tools and methods to improve your approach.
- Journal: Use a trading log to examine what went well and what didn't.
- Accountability: Own your losses and learn from your errors.
- Discipline: Stick to your plan regardless of timeframe or analysis method. Patience is key.