Risk Management (Trading Rules)

First of all, this post is for all the beginner of Futures Traders.

For the starter, we must understand the products (Market).
Different market have different contract specifications. We must know it before we start to trade.
We can choose a product which we interested then we must monitor it on daily basis.

Second, we must PLAN first before enter market.
After we monitor, we must do some paper trading, that mean we trade on paper and not on real market. Do some homework before trade. For example, search some news and informations regarding that product, What factors affect it price movements and so on. After that, we accumulate all the datas and try to analyse it as well as formulise it become our own FORMULA.

Third, we set our TRADING RULES before enter market and DISCIPLINE during trading.
Set our own trading rules is for risk management. High Risk High Return, We must know our entry and exit point (Cut loss/Take profit), we set it before we trade so we can protect our capital through our discipline attitude. After we set trading rules, we must Follow the rules. Dont Greedy and flurried. Place order with confident.

Finally, we try to calculate our profit loss ratio must be >2:1
Profit loss ratio = Profit/loss.
That mean, Profit we must set more than 2 times than loss only 1 times. For example, we plan to take profit 20 points and cut loss only 10 points. If the probability of our success plan more than 60%  then we can make profit every month.