Managing risk as a beginner
The rules that keep a trading account alive: trade size, daily limits and when to stop.
Risk first, profit second
Most new traders think about how much they could win. Traders who last think about how much they can lose. These rules are boring on purpose.
Five rules
- Only money you can afford to lose. Never rent money, borrowed money or money someone else needs.
- One to two per cent per trade. With $100 in your account that is $1 or $2 per trade. It feels slow. It is what keeps you trading next month.
- A daily stop. Decide before you start: after three losses, or after losing five per cent, you stop for the day. Close the app.
- No revenge trading. The trade placed in anger after a loss is almost always the worst one.
- Write down every trade. Asset, direction, amount, result, and why you took it. After a hundred lines you will see your own pattern.
Bonus money is not your money
A deposit bonus has a trading condition attached. Until that condition is met, the bonus cannot be withdrawn — although your own deposit always can. Read the condition before you accept a bonus.
Signs you should stop
- You are trading to win back a loss.
- You are hiding your trading from your family.
- You are putting in money that was meant for something else.
If any of these are true, stop and ask for help. Trading should be a decision, not a compulsion.
Fixed-time trading is high risk. You can lose everything you put in. Nothing here is investment advice.