For beginners rule based trading is better for risk management. Experienced traders may change the rules depending on their experience and situation as per the market condition. But it’s better for all to stock to the rules.
In this post you will learn how you should trade options with rules. These rules will keep you safe.
1. Position Size Should be Small:
It has been told quite often and written many times in financial blogs that when you trade derivatives keep the position size small, but for some strange reason after a few profitable trades, traders start trading with 5-10 lots thinking they will make a lot of money in no time.