Lesson 6 · 8 min
Risk management
Surviving losing streaks matters more than any single winner.
Risk per trade
Many traders risk a fixed small share of the account on each trade, often 0.5% to 2%. At 1%, ten losses in a row cost about 10%. At 10%, the same run costs about 65%.
Size from the stop
Decide where your stop goes first, then size the position so that hitting it loses only your chosen amount. The position size calculator does this.
Reward to risk and win rate
A strategy that wins 40% of the time can still make money if winners are bigger than losers. Both numbers matter together.
Drawdowns are lopsided
Lose 50% and you need +100% to get back. See the drawdown recovery table in Risk & growth.