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The first strategy for managing your money with trades is to prepare a percentage limit. This is the specific percentage of your portfolio that you will use within a trade. The best percentage limit is 1 percent of your portfolio. If you have a day-trading portfolio of $25,000, you should only spend $250 per trade. This keeps your trading risk from being too intense. The 1 percent total should still be used when your portfolio grows or shrinks in size. You can always use a $260 limit on a trade if your portfolio ends up moving toward $26,000 in value. You must always keep to that 1 percent limit so that you aren’t at risk of losing more than you can afford. Do not veer from that standard even when your portfolio is shrinking in size.
