A trader can win 50% of trades and still grow consistently —
or win 70% and still blow the account.
The difference?
👉 Risk management.
Let’s break down the non-negotiable rules every trader must follow.
What Is Risk Management?
Risk management means:
Controlling how much you lose
Protecting capital during bad days
Staying in the game long enough to grow
📌 Survival comes before profit.
Rule #1: Never Risk More Than 1–2% Per Trade
If your account = $1,000
✔ 1% risk = $10
✔ 2% risk = $20
📌 One trade should never hurt your confidence or account.
Rule #2: Always Use a Stop-Loss
No stop-loss = unlimited loss potential.
✔ Define SL before entering ✔ SL must be logical, not emotional ✔ Never widen SL after entry
📌 A stop-loss is protection, not weakness.
Rule #3: Risk-to-Reward Must Be Positive
Good traders think in R:R, not win rate.
Examples:
Risk $10 to make $20 → 1:2
Risk $10 to make $30 → 1:3
📌 Even with a 40% win rate, positive R:R keeps you profitable.
Rule #4: Position Size > Entry Accuracy
Most losses come from: ❌ Oversized positions
❌ Not wrong direction
✔ Adjust lot size according to SL
✔ Same risk on every trade
📌 Position sizing is real edge.
Rule #5: Daily Loss Limit Is Mandatory
Set a max daily loss:
2–3 losing trades → stop trading
Close platform after limit hit
📌 One bad day should not become one bad week.
Rule #6: Avoid Overleveraging
High leverage:
Increases emotions
Reduces decision quality
Causes fast liquidation
📌 Leverage should serve strategy, not ego.
Rule #7: Protect Capital During Drawdowns
During losing streaks: ✔ Reduce position size
✔ Trade less
✔ Focus on A+ setups only
📌 Defensive mode saves accounts.
Rule #8: Never Risk More to “Recover” Losses
This is revenge trading.
Loss → anger → bigger trade → bigger loss
📌 Markets punish emotional traders.
Rule #9: Journal Every Trade
Track:
Risk %
Entry reason
SL logic
Emotion during trade
📌 What gets tracked gets improved.
Rule #10: Cash Is a Position
No setup = no trade.
✔ Flat days are part of trading
✔ Waiting is a skill
📌 Patience protects capital.
Professional Trader Mindset
“My job is not to make money today.
My job is to protect capital every day.”
📌 Consistency beats excitement.
Final Thoughts
Strategies change.
Indicators fail.
Markets evolve.
But risk management never stops working.
📌 Trade to survive first. Profits follow.