Risk management
6 lessons
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- 1.1 Why most beginners lose ✓ Completed
Accounts are rarely ended by one bad entry. They are ended by positions that are too big and have no stop. The maths of losses explains why a big loss is so hard to undo.
- 1.2 Stop-loss and take-profit ✓ Completed
A stop-loss closes a trade at a price you chose in advance to cap the loss. A take-profit closes it at a price you chose to bank the gain. You decide the stop before you enter.
- 1.3 The 1% rule ✓ Completed
Risk a fixed small percentage of your account on every trade, often 1%. A run of losses then costs you a little, not everything.
- 1.4 Position sizing ✓ Completed
Your lot size is not a guess. It comes from three numbers you already have, your risk in money, your stop in pips and the pip value, so every trade risks the same share of your account.
- 1.5 Risk-to-reward ✓ Completed
Risk-to-reward compares what a trade can lose with what it aims to make. Together with your win rate it decides whether a run of trades makes or loses money.
- 1.6 Leverage traps and margin calls ✓ Completed
Leverage lets a small deposit open a large position. It does not change how much a pip is worth, so high leverage plus a big size and no stop can end an account in one move.
Practice mission
White belt mission
5 practice trades, every one with a stop-loss and no more than 1% risk.
A closed practice trade counts when it had a stop-loss from the moment it opened and risked no more than 1% of the account balance at that moment. Graded symbols: EURUSD, GBPUSD, AUDUSD, NZDUSD, XAUUSD.
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