Most traders focus on strategy, but **risk management** is what separates winning traders from losers. Without proper **risk control**, you will still blow your account. This guide teaches the **real formula to manage risk like professionals**.
1. The Fixed Risk Model (1–2% Rule)
The **Golden Rule** of professional risk management is the **Fixed Fractional Rule**: Risk only **1–2%** of your capital per trade.
Position Sizing Formula:
To adhere to the 1-2% rule, you must calculate your Lot Size based on your **Stop-Loss (SL)** distance:
SVG 1: The Fixed Risk Model and Lot Size Calculation
2. Mandatory Stop-Loss and Risk-to-Reward (RR)
Stop-Loss (SL)
**Always use a stop-loss.** Your SL must be **logic-based** and placed at a **structural invalidation point** (e.g., above resistance or below support).
Risk-to-Reward (RR)
The goal is to make more when you win than you lose when you're wrong. The minimum target is **RR 1:2**.
SVG 2: Risk-to-Reward Logic (RR 1:2 Profitability)
3. Psychology and Capital Protection (Mistakes to Avoid)
Risk management fails when psychology fails. You must control emotional pitfalls:
SVG 3: Psychological Risk Management (Behavioral Traps)
Final Thoughts
Risk management is the **system that protects your account**. By adhering to the **fixed 1–2% risk rule**, **mandatory stop-loss**, and focusing on **RR 1:2 or better**, you ensure long-term profitability and **capital protection**. Monitor the market via the Realtime Market Dashboard.
