Wiki/Risk Management 101

Risk Management 101

Verified Step-by-Step Guide2025-12-22

AI Summary

Efficiency 100%

"Never risk more than 1-2% of your capital on a single trade. Use Stop-Losses religiously."

Benefits

  • Verified Steps
  • Noob Friendly
  • Security First

! Risks

  • Market Volatility
1

Position Sizing

Calculate how much to buy based on your stop-loss distance. Equity * Risk% / Distance = Size.
2

Setting Stop-Losses

Place your exit point where your trade thesis is proven wrong. Below support for longs.
3

Take-Profit Strategy

Don't be greedy. Set multiple exit targets to lock in gains as the price rises.
4

Risk/Reward Ratio

Aim for at least 1:2. You can be wrong 50% of the time and still be profitable.

Common Questions

Q: Should I ever move my stop-loss?

Only move it to break-even or into profit. Never move it lower to "give it more room".

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