Unlock the Secrets of Futures Trading with the 60/40 Rule
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- 1.1. Unlock the Secrets of Futures Trading with the 60/40 Rule
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Unlock the Secrets of Futures Trading with the 60/40 Rule
Futures trading can be a lucrative endeavor, but it also comes with its fair share of risks. One way to mitigate these risks is to use the 60/40 rule.
The 60/40 rule is a simple but effective risk management strategy that involves allocating 60% of your trading capital to low-risk trades and 40% to high-risk trades.
The low-risk trades are typically those that have a high probability of success, such as trading in liquid markets with well-defined trends.
The high-risk trades are those that have a lower probability of success, but also have the potential for higher returns.
By following the 60/40 rule, you can reduce your overall risk while still giving yourself the opportunity to profit from high-risk trades.
Here are some tips for using the 60/40 rule:
- Start by identifying low-risk and high-risk trades.
- Allocate 60% of your capital to low-risk trades.
- Allocate 40% of your capital to high-risk trades.
- Monitor your trades closely and adjust your positions as needed.
The 60/40 rule is a simple but effective risk management strategy that can help you to succeed in futures trading.
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