Winning in trading is about probability, setting up a trading plan with rules and system can only determine whether your trading strategy is able to generate consistent positive results in long term.
List of rules must have in your trading:
- Set a Risk % of your capital per trade that you are comfortable with. Never risk more than 2%. Therefore, place a trade with the position size that fits your risk %. Set a maximum risk capital of a day if you are a day trader.
- Set your Risk-Reward Ratio (Stop Loss & Take Profit). If you set your stop loss at -10 pips, take profit at +20 pips, therefore, your risk-reward ratio is 1:2.
- Knowing your “Enter and Exit strategies”.
- Stay focused and review your trades.
Enter & Exit Strategies
Every trader has different enter & exit strategies.
A trading strategy is