Education

Risk Management

Protecting your capital is the foundation of long-term trading success.

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Never Risk What You Can't Lose

Only trade money that you can afford to lose completely. Never trade with borrowed money or funds needed for living expenses.

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Risk Per Trade: 1–2%

Most professional traders risk no more than 1–2% of their account on any single trade. This limits the damage any one bad trade can do.

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Risk/Reward Ratio

Aim for a minimum 1:2 risk-to-reward ratio — meaning for every dollar you risk, you aim to make at least two. This keeps you profitable even when you're only right half the time.

Essential Risk Tools

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Stop Loss

A stop loss automatically closes your trade if the market moves against you by a specified amount. Always set a stop loss before entering a trade — it removes emotion from exit decisions.

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Take Profit

A take profit order closes your trade automatically when the market reaches your target price. It locks in gains without requiring you to monitor the trade constantly.

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Position Sizing

Calculate the correct lot/unit size so that hitting your stop loss costs only the amount you're willing to risk — not more. Our platform shows estimated risk on the order form.

Common Risk Mistakes

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Moving Stop Losses

Moving a stop loss further away when a trade goes against you is one of the most common ways traders blow accounts. Set it and respect it.

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Revenge Trading

After a loss, the urge to immediately trade again to "make it back" often leads to larger losses. Take a break after significant losses.

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Over-Leveraging

Using maximum leverage on every trade exponentially increases risk. Start with low leverage until you are consistently profitable.

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No Trading Plan

Entering trades without a clear plan for entry, exit, and position size is gambling, not trading. Always have a written plan.

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Poor Diversification

Opening multiple correlated positions (e.g., several USD long positions) means one bad event can affect all your trades simultaneously.

Risk Management Checklist

Before placing any trade, confirm each of these:

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I know exactly where my stop loss will be

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I know my take profit target

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My risk on this trade is under 2% of my account

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My risk/reward ratio is at least 1:1.5

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I have a reason for this trade (not just a feeling)

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I am not trading to recover losses from a previous trade

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I understand the current market conditions

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I have enough margin to withstand normal volatility