Be a banker, not a gambler!
Remember, bookmakers are wealthy statisticians!
Money can make money. Everyone knows this. But how much money do you need to start trading? The answer depends on how you will start your new business. The answer is different from person to person.
Account shrinkage is a reality and may happen to you at some time.
The more you lose, the harder it is for you to earn back your original account. This is an important reason why you should make every effort to protect your account.
We want you to keep in mind that you can only risk a small part of your account in each transaction, so that you can survive the losing streak and prevent your account from shrinking significantly.
The smaller your trading risk, the smaller the maximum shrinkage of your account will be. The greater the loss of your account, the more difficult it is for you to return it to a profit-free state.
This means that you only apply a small portion of the total account transaction. The smaller the better.
Small means more.
It is recommended to be less than or equal to 2%.
Although it is good to have a larger return-to-risk ratio, it has disadvantages. In the real world, the return-to-risk ratio is not static.
They must be adjusted according to the time frame, market environment, and entry/exit points.