The Most Important Module
If you remember only one thing from this course, remember this:
You cannot control whether your next trade wins. You can control how much you risk.
Risk management is the process of controlling potential losses.
It includes:
- Risk per trade
- Position sizing
- Stop-loss placement
- Maximum daily loss
- Maximum drawdown
- Exposure management
Why Risk Management Matters
Imagine two traders.
Trader A risks 1% per trade.
Trader B risks 10%.
Both lose five trades in a row.
Trader A has experienced a manageable losing period.
Trader B has suffered a devastating drawdown.
The strategy didn’t necessarily cause the difference.
Risk did.
Key Takeaways
- Risk management protects your capital.
- Losses are unavoidable.
- Your objective is to keep losses manageable.
- Survival comes before growth.
Disclaimer
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
