Important Knowledge Before Starting Trading
Trading has a very high risk, therefore traders need to have knowledge in trading. Before starting trading, traders must have this knowledge to be successful in the world of trading. This knowledge must be owned by traders so that the chances of success are greater and not arbitrary in trading. What is that science?
Money Management and Risk Management
Money management is the management of funds in a trader's trading account. This includes how many lots are in each trading position, what is the distance between the entry price (open position) and the stop loss (SL) and the trader's profit target, as well as the maximum number of trading positions that a trader will open at the same time. With good money management, a trader will have a greater chance of consistently earning profits.
To maximize existing profit opportunities and at the same time minimize the occurrence of risk, risk management is needed or what is commonly known as risk management. With risk management, traders can exercise full control over their money. As a trader, the trader chooses complete control to limit the extent of losses that may be experienced.
Psychology
Psychology is an important point because having good psychology will result in good trades, and vice versa when having bad psychology will result in bad trades as well. Trading psychology is a broad term that encompasses all the emotions and feelings a typical trader will encounter while in the market. Some of these emotions are actually useful and may be for a trader to embrace, but others such as fear, greed, nervousness, and anxiety should be avoided.
This is our short article, hopefully it will be useful for all traders. Watch the video below for more detailed and complete information!
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