Top 5 things to keep in mind while placing a trade?

<p id="isPasted">Here are the top 5 things to keep in mind while placing a trade:</p><ol start="1" style="margin-bottom:0cm;" type="1"><li style="margin-top:0cm;margin-right:0cm;margin-bottom: 7.5pt;margin-left:0cm;line-height:normal;font-size:15px;font-family:&quot;Calibri&quot;,sans-serif;color:#1F1F1F;background:white;">Have a trading plan.&nbsp;This should include your entry and exit criteria,&nbsp;as well as your risk management strategy.</li><li style="margin-top:0cm;margin-right:0cm;margin-bottom: 7.5pt;margin-left:0cm;line-height:normal;font-size:15px;font-family:&quot;Calibri&quot;,sans-serif;color:#1F1F1F;background:white;">Use stop-loss orders.&nbsp;This will help you to limit your losses on each trade.</li><li style="margin-top:0cm;margin-right:0cm;margin-bottom: 7.5pt;margin-left:0cm;line-height:normal;font-size:15px;font-family:&quot;Calibri&quot;,sans-serif;color:#1F1F1F;background:white;">Don't overtrade.&nbsp;It's better to take a few well-thought-out trades than many impulsive trades.</li><li style="margin-top:0cm;margin-right:0cm;margin-bottom: 7.5pt;margin-left:0cm;line-height:normal;font-size:15px;font-family:&quot;Calibri&quot;,sans-serif;color:#1F1F1F;background:white;">Manage your risk.&nbsp;Don't risk more money than you can afford to lose on any one trade.</li><li style="margin-top:0cm;margin-right:0cm;margin-bottom: 7.5pt;margin-left:0cm;line-height:normal;font-size:15px;font-family:&quot;Calibri&quot;,sans-serif;color:#1F1F1F;background:white;">Be patient.&nbsp;Trading is a long-term game.&nbsp;Don't expect to get rich quickly.</li></ol><p>Here is a more detailed explanation of each point:</p><p>1. Have a trading plan. This is arguably the most important thing to keep in mind when placing a trade. A trading plan is a set of rules that you will follow when entering and exiting trades. It should include your entry and exit criteria, as well as your risk management strategy. Having a trading plan will help you to stay disciplined and avoid making impulsive trades.</p><p>2. Use stop-loss orders. A stop-loss order is an order to sell a security at a specific price or below. This is used to limit your losses on a trade. For example, if you buy a stock at $100 and place a stop-loss order at $95, then your order will be executed if the stock price falls to $95 or below. This will prevent you from losing any more money on the trade.</p><p>3. Don't overtrade. Overtrading is a common mistake that many new traders make. They think that the more trades they take, the more money they will make. However, this is usually not the case. Overtrading can lead to impulsive decisions and losses. It's better to take a few well-thought-out trades than many impulsive trades.</p><p>4. Manage your risk. Risk management is essential for successful trading. You should never risk more money than you can afford to lose on any one trade. A good rule of thumb is to never risk more than 1% of your trading capital on any one trade. This will help you to protect your capital and avoid losing everything.</p><p>5. Be patient. Trading is a long-term game. Don't expect to get rich quickly. It takes time and effort to become a successful trader. Be patient and don't get discouraged if you don't make money overnight.</p><p>Following these tips will help you to place trades more wisely and increase your chances of success.</p>

<p id="isPasted">When placing a trade, keep these five essential things in mind to ensure a disciplined and risk-aware approach:&nbsp;</p><ul><li>Follow a Predetermined Trading Plan: Your trading plan should be a personal manual that defines your strategy, the markets you trade, and your routine. Before entering a trade, you should know exactly your entry point, stop-loss level, and profit target. Sticking to this plan helps eliminate emotional decision-making driven by fear or greed.</li><li>Implement Strict Risk Management: Always define your maximum affordable loss per trade before you enter. A common rule is to risk no more than 1-2% of your total trading capital on any single trade. Use proper position sizing to ensure that if the market moves against you, you won't blow your account on one mistake.</li><li>Use a Stop-Loss Order: A stop-loss order is crucial for protecting your capital by automatically closing a position when it reaches a predetermined price, limiting potential losses. This helps prevent a small mistake from turning into a massive loss and enforces discipline in managing losing trades.</li><li>Assess the Risk-Reward Ratio (RRR): For every trade, ensure the potential reward is significantly higher than the potential risk. A general guideline is to aim for a minimum RRR of 2:1 or 3:1 (meaning you aim to make at least two or three times more in profit than you are risking). This mathematical edge, over a series of trades, can lead to overall profitability even if your win rate is moderate.</li><li>Manage Your Emotions: Trading is a mental battle as much as a technical one. Fear of missing out, greed, and the desire for "revenge trading" after a loss can lead to irrational and costly decisions. Cultivate a calm and objective mindset, accept that losses are part of the process, and focus on the execution of your strategy rather than the immediate monetary outcome. </li></ul>