Risk management
In short
Risk management answers the only question that matters long-term: how much do you lose when you are wrong? Position size, stop-loss and diversification are the tools.
Professionals typically risk 0.5-2% of capital per trade. That is how you survive losing streaks — and only survivors profit from the next opportunity. Our lab documents ruthlessly what happens without risk rules.
What is the 1% rule?
Risk at most 1% of capital per trade — ten straight losers then cost under 10% instead of the account.
Related terms
Information, not investment advice. More of this? The newsletter.