Today Market Suddenly dump, so I explain why need risk management is so important for Every Trader.
📌 If you enter a $100 trade and lose 15%, you’re down to $85.
📌 If you make 15% profit on your next trade, now you have $97.75
📌 It's harder to recover losses than to preserve funds. Don't think how much you can make on a trade. Think of how much you can lose on a trade. Risk-Reward ratio is key.
🎯 Also win % does not make a successful trader, but strategy and risk management do.
For example:
✖️ One trader has a 60% win rate but his portfolio is down 6% using a 2/1 risk-reward.
✔️ Another trader has a 30% win rate but his portfolio is up 12% using a 1/5 risk-reward.
Expect to lose short term. Plan to win long term.
📌 So, it’s necessary to have very strict rules on risk management that help you to always preserve the capital and not to take crazy risks.
risk management is very easy for traders who are able to control their emotions in trading. Stop loss is impossible for us to handle 100% in trading, some beginner traders who jump into cryptocurrency trading are often unable to control their emotions, this includes me when I first jumped into trading when this dump became frightened and made the wrong decision. so it is necessary to learn how to manage risk and be consistent with the initial target setting.