Most beginner conversations focus on how much money they can make. Professional ones focus on how much they can afford to lose. Risk management is the only part of trading you fully control — the market owes you nothing.

The 1–2% rule

A simple, time-tested guideline: never risk more than 1–2% of your account on a single trade. If your loss stops out at the planned level, the damage is small enough that a bad streak of ten trades still leaves your capital largely intact and your judgment calm.

Always know your exit before your entry

Decide where a trade idea is wrong before you place it. That single number — the stop — defines your risk. Position size then flows from the stop distance: a tight stop allows a bigger size; a wide stop demands a smaller one. Never the reverse.

One losing day is not a strategy change

• Do not double position sizes to recover losses — this is how accounts die.
• Set a daily loss limit and stop trading once it is reached.
• Review results weekly, not through the lens of one bad session.

Diversify your edge

Spreading capital across uncorrelated markets — forex, crypto, indices, commodities — smooths the equity curve. A crypto drawdown can be offset by an index position, which keeps you in the game long enough to benefit from your best ideas.