Risk management is one of the most important parts of successful trading. Your first goal should be to protect your capital, not chase profits.
The first rule is to use stop-loss orders. A stop-loss limits how much you can lose on a trade.
Next, calculate your position size. Never risk more than a small percentage of your account on a single trade.
Use risk-to-reward ratios. Aim forex brokers for day traders at least a 2:1 ratio to stay profitable in the long run.
Avoid overtrading. Take only high-quality setups that fit your strategy.
Set daily or weekly loss limits. This helps prevent emotional decisions and revenge trading.
Always test your strategy before trading live. Use demo accounts to understand how your system performs.
Risk management won’t guarantee profits, but it will protect you from large losses. Make it a core part of your trading process.
