Dear ,

Managing risk is the cornerstone of successful stock trading. A disciplined approach not only protects your capital but also paves the way for consistent profits. Here’s a step-by-step guide to manage risk effectively:

Set a Stop Loss at 1% of Your Total Capital:

Never risk more than 1% of your total capital on a single trade. This rule ensures that no single loss can significantly impact your portfolio.

Buy in Multiples of 3 or 4:

Take positions in multiples of 3 or 4 lots in order to exit in 3 to 4 stages.

Define Stop Loss and Target Before Entering:

Always have a clear plan before executing a trade. Know where you’ll exit if the trade goes against you and where you’ll book profits if it works in your favor.

Focus on a Risk-Reward Ratio of 1:3:

Analyze trades with a target of earning at least three times the amount you’re risking. Have two targets for every trade to balance immediate profits and extended gains.

Exit in Phases:

1st Lot: Exit on a small rally to secure quick gains.

2nd Lot: Exit at the first target and shift your stop loss to the entry point or a better support level to lock in profits.

Remaining Lots: Exit on extended targets to maximize returns from the trade’s full potential.

Keep a Daily Trading Log:

Document every trade, including mistakes and lessons learned. Reviewing your log regularly will help you refine your strategy and avoid repeating errors.

By following these steps, you can trade with confidence, knowing your risks are well-managed. Trading isn’t about winning every time—it’s about protecting your capital and maximizing opportunities when they come your way.

Best regards,

Vinoth Kanna

Admin,Gale.in