Most traders don’t blow accounts because of bad strategy — they fail because of **zero risk management**. If you implement **fixed risk rules**, you automatically improve your long-term results and achieve **capital protection**.
1. The Fixed Risk Model (1–2% Rule)
Your risk per trade must be a **fixed percentage** of your account, not a random emotional lot size.
- **Fixed Risk:** **1–2% per trade** (The core rule of capital preservation).
- **Aggressive Max:** 3–4% max (only for highly experienced traders).
SVG 1: The Fixed Risk Model (Lot Size Calculation)
2. Mandatory Stop-Loss and Risk-to-Reward (RR)
Stop-Loss (SL) Rule:
**Never trade Gold or Forex without a stop-loss.** Your SL must be placed at a logical structural point (below key support or above resistance). If you can't place an SL, the trade setup is not valid.
Risk-to-Reward (RR) Rule:
Consistent **RR 1:2** is the minimum standard for profitable trading.
SVG 2: Risk-to-Reward Logic (Why 1:2 is Profitable)
3. The Capital Protection "Kill Switch"
You must decide when to **STOP trading** to protect your capital and **psychology**. This prevents revenge trading.
- **Max Daily Loss:** **4–6% of account**
- **Max Weekly Loss:** **10–12% of account**
- **Action:** Once the limit is hit → close the platform and come back another day.
SVG 3: Max Daily Loss (The Drawdown Kill Switch)
4. Final Rules for Capital Preservation
Professional traders treat trading like a business, not like emotional gambling.
- **Gold (XAUUSD) & Over-Leverage:** Avoid over-leveraging on Gold during high volatility (news). Small lot with clear SL is always safer.
- **Averaging Down:** Never add to losing positions (Martingale). If SL is hit, accept, review, and move on.
- **Emotional Control:** Never trade when stressed or angry. Judge your performance over **20–50 trades**, not just one or two.
Final Thoughts
Risk management is the **system that protects your account**. By adhering to the **fixed 1–2% risk rule**, **mandatory stop-loss**, and **Max Daily Loss limits**, you ensure long-term profitability and **capital protection**. Monitor the market via the Realtime Market Dashboard.
