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Risk Management

Survive first, profit second — the 2% rule, stops and sizing pros use.

2% RuleStop-Loss Always1:2 Min Reward
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Risk management — editorial illustration

The 2% rule — never blow up

Risk max 1–2% of equity per trade. On $5,000, 2% = $100 max loss. Ten losses in a row = –20%, recoverable. Without stops, one trade can wipe you out. Size every position with calculators.

1–2%Max risk per trade
1:2Minimum risk-reward
200%Min margin level
3RDaily stop-out limit
1

Position sizing

Lots = Risk $ ÷ (Stop pips × Pip value). Example: $100 ÷ (20 × $10) = 0.50 lots.

2

Stop-loss

Placed beyond structure (swing/ATR), not random pips. Never move it further away.

3

Take-profit

Set before entry at 2R+. Partial at 1R, runner to 2–3R locks in edge.

Risk-reward table

SetupRiskTargetWin-rate needed to break evenVerdict
1:1$100$10050%Avoid after costs
1:2 ✅$100$20033%Minimum pro standard
1:3$100$30025%Ideal swing target
1:0.5$100$5067%Scalp only, needs high win-rate
Tip: Only take 1:2 or better. At 1:2 you can lose two of three trades and still break even before costs.
Leverage warning: Upto 1:100 amplifies both profit and loss. High leverage does not increase risk if size is fixed — over-sizing does. Read the Risk Disclosure.

Pre-trade checklist

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