This is the best way to make sure that your losses are controlled and that you do not become too emotional with your trading.
Every trade, no matter how certain you are of its outcome, is simply an educated guess.
Reward, on the other hand, is unknown.
The key is to make your overall trading approach meaningful but to make any individual trade meaningless.
- Annotations on Forex Trading Rules: Risk Can Be Predetermined; Reward Is Unpredictable

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Tags: jun_08, investopedia.com
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