One trade is all it takes to blow a trading account.
Here’s just 3 ways in which it can happen:
- You risk too much on a single trade
- You lose much more than intended because you didn’t stick to your original stop
- You average down
Now, if you can internalise that there is no strategy out there that is 100% accurate…you will come to realise the importance of risk management. Remember: on trade is all it takes to blow a trading account.
No matter if your strategy profitable:
- 50% of the time
- 70% of the time
- 90% of the time
… even if your strategy is profitable 99% of the time, there is still a 1% chance of a trade ending up a loser. And that one loss / one trade could be the cause of you blowing up.
Again…there’s no strategy that’s profitable all the time, and one trade is all it takes to blow up. Knowing only these two things should make you realise that not respecting risk could be detrimental to your trading.
Respect risk, respect the markets, apply proper risk management principles and you’ll be way ahead of most traders.
Thanks so much for reading. Hope you and your loved ones are well and safe.
Thanks and Regards,
Trading SOS SOS