- Risk 0.5% of your equity for each trade. This is to adopt a good money management and to prevent you from draining your financial resources within a short time. By sticking to this percentage of equity risk per trade, you can afford to lose at least 200 consecutive trades before you wipe out your account.
- Use stop loss and take profit level. This is to prevent sharp market movement which goes against your position drastically. In addition, it is a good practice as you may be less rationale when market is moving against you.
- Ensure a risk reward ratio of at least 2. By keeping to this approach, you can afford to make losses 50% of the time but you are still profitable.
If there are just 3 things you must do, please do the following: