HOW I LOST MONEY IN 2020-21(MONEY MANAGEMENT)

 HI FIRIENDS

                    In the Financial Year 2020-21 I was doing intraday trading . At the end of year I lost 70% of my capital. Like most of the Trader I was also hurt. Then I started analyzing my ledger. After detailed analysis I found that 

Total no of trades-161

No of profitable trades-83

No of losing trades-78

Now the big question arises why & how I lost money. The answer is............

I was trading with 1:1 Risk Reward.

My capital is 10,000/-

In trade-1 trading amount is 50,000/-(My broker is giving 5X magin limit). Risk taken-1%

trade-1 ended in loss- Gross loss 50,000/-*1%=500+65(approx charges). Net loss=565

trade-2 trading amount is 45,000/-( 5 X (10,000/-500)). Risk taken-1%

trade-2 ended in profit- Gross profit 45,000/-*1%=450-65(approx charges). Net profit=385

Hence after two trades(1 profit & 1 loss) my capital is

10,000+385-565=9,820/- which means a loss of 1.8% after 2 trades

similarly I lost money though my success rate is more than 50%

Lesson learned 

Risk reward should 1:2

Risk capital should same for all trades