Risk management by determining where and when you should stop when you win or when you lose continuously.
But of course, it is not necessary to start getting used to the strategy that has just been implemented. ..
The risk management strategy consists not only in setting a stop loss, which will prevent the liquidation of your deposit, but also sets a maximum amount of 3-5% of your deposit for opening an order. And it can also be applied to gambling, thus limiting the size of the bet.
Wait, do you mean someone can use as high as 3% to 5% of the equity for a single order? That is outrageous. That means using the upper limits, if something goes wrong, the trader will be burnt out in 20 traders? There is hardly risk management in this. From what I know, the highest exposure you should be willing to do is 1% of your capital. If you have $1k in your trading account, you should never lose more than $10 per trade so that you can remain in business for as long as necessary and when hard luck hits, you will be able to shoulder it and not get liquidated.
You deliberately ignored the figures I gave, because I wrote about 3-5%, but you made the calculation based on the maximum value. If you calculate 3% of the deposit, the trader can make 33 unsuccessful trades. But you have to be a complete loser, who has no place in trading, in order to make only unprofitable trades) In addition, there is such a thing as Risk/Reward, according to which one successful trade must compensate for the loss of at least 3 unsuccessful trades. Every trader can reduce this percentage if they have enough capital, but even with $1,000, you are unlikely to open an order for 10 bucks.