Risk Management, How is risk managed?

 How is risk managed?

👉Hindi

So for that, we have to follow some rules.

risk management is a very big topic There is no difficulty in a blog, but after reading this blog completely, you will be able to manage your risk very easily. You can think Start that a blog may be left to you, but believe that following the rules will only manage your risk.

Risk per trade (RTP)

RTP means that whenever you trade, you have to keep only 2% to 3% of the entire capital at a risk in a trade, that whenever you want to trade, you have to keep a certain amount at risk.  Maybe, you do not understand my point but we agree with an example, if you have a capital of 10000, then whenever you want to trade, then 3% of 10000 i.e. 300 is to be kept in a trade at risk.

Why do you want to do this?  Q that if you put a large amount of the entire capital at risk in one trade, then the loss will happen, the entire capital will be 0 (zero).

Risk management is a very big topic.  It is not difficult to understand in a blog, but after completing this blog, you will be able to manage your risk very easily.

What is your hit rate?

Suppose if you make 10 trades then 5 trades out of 10 i.e. 50% of the trades go right, 7 trades i.e. 70% of the trades go right.  Your hit rate is at least 50% ie 5 out of 10 trades should be correct then only you will be profitable and the important thing is that you may have 7 or 8 trades right but you know right  But how much are your risk and reward?  A is also very important.

How much are your risk and reward?

That is, you keep 300rupees at risk in the trade and you take only 300rupees at the time of profit in front of it and it is called 1: 1. On the other hand, know that your stop loss in the trade is 2 rupees and in front of it, you take 4 rupees and exit the trade, then your risk and reward is called 1: 2.

That means whenever you trade, how much reward you have in front of your risk is very important.  You have to take a reward of at least 1: 2 in front of your risk.  Only then will you be able to make a profit.

Hit rate (win rate) [%] is given and risk and reward is given in [:]

 Your win rate and how much risk and reward will be in front of it, only then you will be able to make a profit. You will understand by looking at the above score.

Position sizing

This means that the amount of Shero that you take while taking trades is to be saved.  How will you have a formula for that?

The OA formula will tell you how much quantity to take when taking the trade.  Let's understand from an example that we have to buy sbi which is at 300 and our stop loss is at 297, then in this case what will be our quantity?  Trade at risk is 300 according to 10000 capital 3% = 300 and stop-loss 300-297 = 3, then our quantity will be 100 {300/3 = 100}

According to this formula, we do not have to buy quantities above 100.

summary

We just have to follow these rules.  Complete risk management will come.

risk per trade:

Depending on the capital, only 2% to 3% is to be placed in a trade at risk.

win rate:

50% must be at least (out of 10 trades, at least 5 trades must be correct.)

risk & reward ratio:

1: 2 is to be taken (if the stop loss is 2 rupees, then the target must be at least 4 rupees).

Position sizeing:

quantity = risk per tred / stop loss in rupees(Quantity has to be decided according to this formula.)

 Note: If you feel that the rules also work?  So for that, you can read the blog by clicking on it.