From the perspective of capital position, risk management can be roughly divided into two different components:  the first and extremely important point is that each transaction according to the investor’s own trading method and  account size set the maximum loss that can be tolerated. In fact,  the biggest characteristic of failed traders is the occurrence of unexpected losses large losses. From the subjective  concept of loss control,  in addition to setting a good stop loss level also need to overcome their own psychological barriers,  to have the courage to bear failure. There are times when we don’t take the losses we should take,  and the market pulls back and gets us out of the rut, but that just keeps us doing it over and over and over again,  only to make our losses even bigger. So for us investors,  we have to limit our losses to a small percentage of our capital, to prevent some kind of devastating risk. Of course,  losses are everywhere, and even the best trading systems may end up with a series of losses,  and there is no way to avoid such things. If you take too much risk on every trade,  the probability of success is zero. In fact,  the great investment guru Gann once gave the majority of investors such advice:  each trade losses do not exceed 10% of the account. Professional traders win only 35% of the time. So you have to learn  to protect yourself in a series of inevitable losses.

Today Xiaobian shares some insights on the risk management of capital positions,  which may be helpful and reference for your capital positions. At the same time,  thank you for the pictures and text support from Winner Wealth network or Stock 767 stock website,  which help us learn stock knowledge and provide a more convenient way to learn.