Risk Management 13/4/22 9:41

Josh Trader

risk
management

Risk management is undoubtedly the most important aspect of trading.

For some of you, the difference between you and a profitable trader, is risk management.

My personal risk management rules:

1% account risk per trade
minimum 3R

This is fully subjective, as everyone has a different success rate. If you have a lower success
rate, you need to look for higher R trades; If you have a high success rate, you can look for
lower R trades as you are more consistent and don’t need big winners to be profitable.

Some people use more % of their account on trades they expect to last longer than intra-day
scalps.

Sometimes to compensate for the opportunity cost of the long time your capital is locked in a
trade, you might risk more to make the reward more “worth it”.

This is something I’m still working on myself as sometimes I might get overly confident after
winning a trade, and then bet 2R on the next trade and lose it. This is something I have
worked on slot recently and am improving at it.

Trading is survival based

At the end of the day you don't want to be losing over 10% of your account per trade, that
would be stupid

Below is a very informative and helpful guide (from @edgewonk on twitter)

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