The article is a bit long, but it's worth everyone's patience to browse through.

What is Risk Management for trading
What is Risk Management in trading? First of all, if you are an all-in type of player and a lucky star, this article is not valid for you, because you are the chosen one, creating miracles with great strength, a passionate and brave warrior. Risk Management is not for you, but for long-term traders who need the ability of capital management.
Recently, I found that many group members rely on their enthusiasm and their own perceived direction to place orders, rolling over at high positions and mercilessly cutting losses at low positions.
1. What is a risk plan.
Before trading, take a look at how much capital you have and how much risk you are willing to take for each trade. This needs to be planned in advance. The proportion of risk usually depends on your capital and your ability to earn money off-exchange. For example, if you invest 50,000 and earn 10,000 off-exchange per month, then the monthly risk plan should not exceed 2,000, which is less than 20% of the off-exchange income and 4% of the total capital. This can ensure that even in the case of extremely bad luck and consecutive wrong trades, the loss of the account will not affect the subsequent trades. For professional traders, the risk control for each trade should be within 2%, and the monthly trading loss should not exceed 10%. If it exceeds, force yourself to take a break and carefully consider your operations for the month.
Trading is a mechanical behavior, and humans are emotional creatures. Therefore, I believe that setting a risk plan that can tolerate psychologically is the most important. If having 50,000 on the market and a stop loss of 2,000 is not acceptable, then a plan that suits your psychological tolerance should be made.
2. Profit and Loss Ratio
Trading is not a prediction or a blood-boiling goal, but a probability of profit and loss ratio. Every entry and exit, stop loss and take profit of each trade should have a reasonable plan, which is what a qualified trader should do.
Three, trends and take profit targets
Why would take profit targets and trends be Risk Management?
Trading is not a guaranteed signal, strictly implementing the take profit plan is the key to stable profits.
Trends always start from small time frames. Some people may ask why your order is so profitable. With different time frames and targets, orders that form the major trend on small time frames are gradually reduced positions, securing profits along the way, ensuring sustainability.
The target of take profit, 1:2 and 1:3 are both reduce position levels. When the target level is not visible, reduce position proportionally, but earn a little less. After all, everyone has different market perceptions.
Four, the subtraction of transactions
When you reach a certain profit in the market, it is always a good idea to withdraw the principal. There are many opportunities in the market, and only by being alive can you have hope of getting rich.
I sincerely share my trading experience with everyone, hoping to be helpful to friends. The above experience is for reference only. If anyone has good trading experience, you are welcome to communicate with each other and grow together!
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