Today I will share how to manage risk with a capital of $ 20?
I will only share 1 point in each post, so that you understand it well.
1. Limit Losses
Determine the loss limit in 1 day, this is very important so that you can survive in the market. !!
For example, with a capital of $ 20, the maximum loss is $ 2 per day and that includes the cost of opening / closing a position, so make sure your Stop Loss is no more than $ 1.5 (assuming the fee is $ 0.5).
With SL $ 1.5, you can only trade 1x per day if your first trade is a loss, if your first trade is a profit, you can trade the 2nd up to a maximum of 3x in 1 day.
Why limit losses?
The answer is so that you can survive longer in the market, with the hope that the longer you are in the market, the more you know.
Why should losses be limited to $ 2 per day?
Because with a capital of $20, honestly you will not be able to survive for 1 month, a realistic time is 10 days. So (capital $20: 10 days = $2)
The first 10 days of trading will show a person's eligibility. If your capital runs out before 10 days, maybe you should fix the (strategy) you are using, or maybe you are too careless, too confident or maybe have poor emotional control.
The point is if your capital runs out before 10 days, then you are not worthy of being in the market.
I will share the 2nd point in the next post.