At the heart of successful trading lies risk management. Without a solid plan to manage your risks, even the best trades can lead to undesirable outcomes. Incorporate these strategies to safeguard your investments:
- Diversification: Do not put all your eggs in one basket. Spread your investments across various asset classes to minimize potential losses. This way, a downturn in one area wont tank your entire portfolio.
- Utilize Stop-Loss Orders: The use of stop-loss orders allows you to limit potential losses. By setting a predetermined loss threshold, the platform automatically closes a trade when it hits that level.
