All transactions involve uncertainty. Often, by the time we realize our mistakes, we have already missed many trading opportunities and wasted a lot of capital. Regardless of the past trading accuracy and profitability, or how many years of trading experience one has, there is always a question that we need to take seriously in trading: improving the return on investment. So, how can we manage risk and try to improve the return on trading?

1. Improve trading strategies by continuously reviewing past trades

Obviously, more refined system data and signals can increase the accuracy and profitability of trades, but no one, including computers, can provide absolutely perfect trading signals or methods. As traders, we need to continuously review and optimize the original data to improve and adjust future trading strategies.

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Although the probability of getting heads or tails when flipping a coin is one in two, continuous tossing means the probability of getting heads will continue to increase. Rich data, a large amount of practice, and reflection are important ways to improve trading confidence and skills, and to manage risk well.

2. Know where your "bottom line" is

The "limit" of risk-taking in trading has always been a hot topic. Many people think that to get high returns, one must inevitably bear high risks. To some extent, this is true. But if we are too aggressive, it is very likely that a single blowout will cause the account to suffer a heavy blow, and even incur huge debts.

In "The Art of War" by Sun Tzu, there is such a viewpoint: success is accidental, failure is inevitable, and knowing that one will fail is more important than knowing that one will win. What does this mean? Whether it is going to war, managing, starting a business, or investing, one should first have a very clear understanding of risk. Because success may be a matter of adding flowers to brocade, but failure may determine life and death in one fell swoop.

So, if you have not conducted long-term repeated tests in a real account, try not to easily risk half of the funds in your account for speculative trading. If you are confident in a tested system, you can try to slightly expand the scale of trading. Different traders can bear different maximum risks, and it is best not to blindly copy others' trading models.

3. Try simulated account tradingIf you wish to employ new trading methods or tools, it is recommended that you first try simulated account trading.

Of course, we may also encounter such problems: the operations seem to go well during the simulation test, but once we switch to actual account trading, things may not go as expected. Why is that? The trading environment has changed, and our mentality, emotions, and decision-making will also be affected accordingly. In addition, in a real trading scenario, it is also necessary to carefully consider the experience of the trading software or tools provided by the broker.

It is suggested that before opening a new account or trying new trading tools, you can try to inquire with relevant service personnel to obtain more information. Of course, at any time, do not exceed your maximum risk-bearing capacity.

4. Master the timing of opening and closing positions

Even the best system in the world may have the possibility of making mistakes. It is recommended not to rely too much on the system, nor to base decisions solely on one or two trades. Even if you make a profit, you should expand the scale of your trading at a reasonable speed within the maximum risk set for the trade. The same applies in the opposite situation.

For example, if the trading price deviation exceeds the stop loss, the loss may exceed expectations, and if the broker does not remind you in time or help you with intelligent risk control, the trade is likely to continue to develop in a direction that is unfavorable to you. Under this circumstance, unless you have a thorough understanding of the market dynamics, the broker's methods, and the risks involved, it is recommended to close the position in time and reopen it when the opportunity arises.

Always remember: if some bad trades have caused you to lose most of your assets, you may also lose the opportunity to make money. So if you want to make a profit in trading, you must first learn how not to go bankrupt.

5. Positive psychological suggestions

Before trading, do a good job of psychological suggestion, telling our subconscious what to do, and you may achieve amazing results. For example:1. My computer has excellent internet connectivity.

2. I am in high spirits, with a calm mindset and ample time.

3. I have ample funds, which allows me to place orders continuously and provides me with a sense of security. I won't be disheartened by occasional failures, nor will I hesitate to place orders due to financial pressure.

4. I have already formulated a strict and precise plan and strategy in advance, and I can execute them rigorously. I can ensure that I am not arbitrary or capricious when placing orders. My rationality can control my emotions, so I am full of confidence.

5. I am well-versed in the standards of technical signals and can only operate on signals that meet the perfect standards. I will not look for non-standard signals to place orders because I am not greedy. I have confidence in winning with standard signals because I am not fearful.