If you have $100 and you want to risk just 1% which is $1, you have to make sure your stop loss is set in such a way that if the market goes against you, you don't lose more than $1.
For every 1$ you risk, aim to make double, triple or even four times the 1$, Thats the basic idea of risk:reward ratio. ofcourse you also need a good risk management system.
If you have $100 and you want to risk just 1% which is $1, you have to make sure your stop loss is set in such a way that if the market goes against you, you don't lose more than $1.
You basically decide how much of your capital you are willing to risk. 1% 0r 2%
I only risk 1% of my capital....
For every 1$ you risk, aim to make double, triple or even four times the 1$, Thats the basic idea of risk:reward ratio. ofcourse you also need a good risk management system.
Use 1.5 x ATR
Read up on risk:reward ratio and how to calculate it.