Volatility is part of the market
Risk management starts with accepting that even a well-researched trade can move against you. Your plan should define what you will do before the market becomes stressful.
Eight useful habits
The most useful controls are simple and repeatable. Combine exposure limits with account security and regular reviews.
- Limit the size of one position.
- Keep leverage low unless you fully understand liquidation risk.
- Diversify only when you can monitor each asset.
- Define an invalidation level before entry.
- Do not chase a fast move after it has already happened.
- Use unique passwords and strong account protection.
- Review fees and funding costs.
- Take breaks and avoid revenge trading.