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PREVIOUS:On the other hand, green is associated with expansion & prosperity, which gives traders confidence & motivates them to hold onto their positions or make new trades. By being aware of these psychological connections, traders can take advantage of the feelings that colors arouse in their audience. Moreover, color has an effect on more than just specific traders; it can also influence the mood of the market as a whole.NEXT:Depending on a person's personal risk tolerance & the state of the market, effective risk management entails figuring out how much capital to put into each trade. It is important for traders to have precise rules regarding position sizing, which is essentially determining the number of shares or contracts to purchase or sell based on the size of their overall portfolio and the particular risks involved in each trade. Trading professionals can easily see their exposure levels & make any necessary adjustments by using a color-coded system for risk assessment.
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