The 5 Risk Management Rules Every Trader Must Live By

Every profitable trader obsesses about one thing: not losing.

1. Risk a fixed % per trade Never risk more than 1–2% of your account on a single trade.

2. Always pre-define your stop loss Your stop loss is decided before you enter — never after.

3. Size from the stop, not the gut Position size = (account × risk %) ÷ stop distance.

4. Cap daily and weekly losses Set a hard daily loss limit (e.g. 3%).

5. Asymmetric reward Don't take trades unless reward is at least 2× the risk.