Risk Management & Profit System
Protect Capital First, Profit Comes Next
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1. Why Risk Management is Important?
Many traders focus only on profit, but professional traders focus on risk. If you control losses, profits will automatically grow over time.
Protect capital first. Profit comes later.
2. Stop Loss (SL) Placement
- Place below swing low (BUY)
- Place above swing high (SELL)
- Never trade without SL
Stop Loss is your protection, not your enemy.
3. Target Setting
- Use support/resistance levels
- Follow trend direction
- Avoid greedy targets
Small consistent profits are better than big risky trades.
4. Risk-Reward Ratio (RR)
Risk-Reward ratio defines how much you risk vs how much you gain.
- Minimum 1:2 recommended
- Example: Risk ₹100 → Target ₹200
Good RR ensures profitability even with low win rate.
5. Position Sizing
- Risk only 1–2% of capital per trade
- Avoid over-leverage
- Control emotions
Survive first, grow later.
6. Golden Rules
- No Stop Loss = No Trade
- No Risk Control = No Profit
- Consistency beats luck
Discipline is more important than strategy.
Final Insight
A trader who manages risk will always stay in the game.
Shaktimatha Learning
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