Most traders focus 80% of their time on finding better strategies and only 20% on risk management. The smart ones do the opposite.

Here are the risk management rules that actually matter.

The Most Important Risk Rules

  1. Never risk more than 1% of your account on a single trade This is the golden rule. On a $1,000 account, that’s $10 max per trade.
  2. Always use a stop loss Trading without a stop loss is gambling, not trading.
  3. Set a daily loss limit If you lose 3% of your account in one day, stop trading. Walk away.
  4. Respect your weekly loss limit A good rule is to stop trading for the week if you’re down 6–8%.
  5. Position size correctly Calculate your lot size based on your stop loss distance, not on how strongly you feel about the trade.

Bottom line: Good risk management won’t make you rich — but bad risk management will almost certainly make you broke.