Is better to use small money or learn risk management first before investing especially newbies.
It's important to educate ourselves first about the investment that we'll be entering in. This is to have a better understanding and that includes risk management and the amount of capital to use. Because if you have idea on the nature of what you're getting into, you'll know the best thing to do in order to minimize the possibility of facing losses.It doesn't matter if the progress is slow as long as you're doing it right (trying demo, using small capital and learning through experience). Because if you already have deeper knowledge then chances to gain are getting bigger since you already know the do's and don'ts to avoid losses when you invest your money. Of course using spare money is always better, even you didn't profit it's not hard to accept it since the money you use is the amount that you can live without.
However, I'd play the skeptic card here and argue that not all experiences are good teachers. You might lose half your capital in a risky trade and learn a valuable lesson, but hey, you've still lost half your capital. It's like learning not to touch a hot stove by burning your hand - sure, you've learned something, but at what cost?
It's indeed tempting to throw caution to the wind and use more than just spare money when the promise of big gains is dangling in front of us like a shiny lure. But like you said, keeping investments within our risk tolerance is crucial. It's like ordering dessert - you might really want that extra slice of cheesecake, but can your waistline afford it?
