No trading method will be successful without a solid risk management foundation. I learned this when I started. I now use a 3/3 rule. Meaning I trade until I receive 3 winning trades or 3 losing trades for the day. I use a 1:3 risk:reward ratio. This gave me greater chances of ending the day green. Then I built a strategy that works around my 1:3 risk:reward ratio.
Here's how it looks.
W/L
3-0 Winning Day
3-1 Winning Day
3-2 Winning Day
3-3 Winning Day
2-3 Winning Day
1-3 Break Even
0-3 Losing Day
This gives me a 14.28% chance of ending the day in red. This also builds my confidence during the day because I know once I win one trade, I at least break even.
1:2 risk:reward is also good for trading 3/3. There is just no break even point.
W/L
3-0 Winning Day
3-1 Winning Day
3-2 Winning Day
3-3 Winning Day
2-3 Winning Day
1-3 Losing Day
0-3 Losing Day
Here's how it looks.
W/L
3-0 Winning Day
3-1 Winning Day
3-2 Winning Day
3-3 Winning Day
2-3 Winning Day
1-3 Break Even
0-3 Losing Day
This gives me a 14.28% chance of ending the day in red. This also builds my confidence during the day because I know once I win one trade, I at least break even.
1:2 risk:reward is also good for trading 3/3. There is just no break even point.
W/L
3-0 Winning Day
3-1 Winning Day
3-2 Winning Day
3-3 Winning Day
2-3 Winning Day
1-3 Losing Day
0-3 Losing Day