Notes
- This lecture focuses on risk management in trading. The goal is to teach us how to control and mitigate risk as much as possible.
- Michael risks up to 3.5% per trade.
- 1% risk per trade is recommended for consistent growth, especially for beginners.
- 2% risk is common in the industry, but the number can be adjusted based on experience and the ability to handle losses.
- Michael advises adjusting the stop to break even once the first profit target is hit.
- We should cut the position or reduce the risk if our trade hasn’t moved in our favor after a set period.
- New traders often have the urge to exit trades quickly, but patience and adherence to stop-loss levels are critical to long-term success.
- We don’t need to catch every pip of the move. Taking just a portion of the move is sufficient for long-term profitable and consistent trading.
- Successful traders often reduce their exposure after a loss. For example, if a trade results in a 2% loss, they will reduce the risk to 1% on the next trade.
- The gradual reduction in risk helps manage emotional stress and keeps traders in the game longer.
- The key to trading success isn’t about making millions quickly but being consistent and protecting your capital.
Optimal Trade Entry Levels And Fibonacci Extensions
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