Risk Management — Protect Your Trading Capital

Many traders focus on entry, but professionals focus on how much to lose.

Here is the 1% rule I use:

1. Never risk more than 1% of your total capital on a single trade. If you have $1000, your max loss per trade is $10.

2. Always set Stop Loss BEFORE you set Take Profit. Your SL is your safety belt.

3. Risk/Reward should be at least 1:2. If you risk $10, you should be targeting at least $20.

Example: BTC is at $63k. I will only Long if I can place SL at $62k and TP at $65k. That is $1000 risk for $2000 reward.

You don't need to win 90% of trades. If you win 40% with 1:2 RR, you are still profitable.

How do you manage risk? Do you use fixed % or fixed $?

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