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Risk Management

Risk management is the most important aspect of trading.  You will never be correct on 100% of your trades so you need to hope for the best, but expect the worst.  

Risking 1% - 3% of your account value per trade is usually seen as an acceptable amount of risk.  Setting weekly limits on losses to your account value is also a good idea so you can give yourself a chance to mentally reset before you blow up your account if things aren’t going your way.

Whatever risk level you decide you are comfortable with, it is paramount that you decide it BEFORE YOU ARE IN A TRADE.  Once your order gets filled and you start seeing your position gain and lose value with every tick, emotions can take over quickly.  

Longevity and capital preservation are the name of the game.  If you can keep your losses to manageable levels, your wins will add up and your account will grow.  

 You should only be trading with money that you are okay with losing.  That can be very different numbers to different traders.  Trade smart and the profits will follow.

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