This 1% risk is a function of two flexible components:
• Your Position Size: % of your account in the trade
• Your Trade Risk: % between your entry price and your stop loss
If I stuck to this one rule the day I started trading I would have...
• Saved $1,000's of dollars in losses.
• Sped up my learning process.
• Avoided every major account drawdown I've had.
If you're new to trading, make sure you stick to this 👇🏼
The 1% Rule 🧵
This 1% risk is a function of two flexible components:
• Your Position Size: % of your account in the trade
• Your Trade Risk: % between your entry price and your stop loss
Trading a volatile stock? Size down on the trade.
It's great to make money, but worthless if you don't have a system to keep it.
Over 50% of my trades are losses, but I'm still profitable because of the 1% Rule.
Keep losses small & let winners run!
New traders are EXACTLY who benefits the most!
By limiting each trade's potential losses to 1% it will take you:
• 29 straight losses to fall 25%
• 69 straight losses to fall 50%
It's tough to be that consistently bad 😅
This doesn't mean overtrade. But it'll be nearly impossible to blow-up your account if you stick to 1% risk per trade.
This is how you speed up your learning process.
Go through your past trades. How much $ would you save if you eliminated every large loss.
No bag holding, no averaging down, no emotional attachment.
You INSTANTLY become a better trader.
Risk, at most, 1% of your total portfolio on each trade.
Portfolio Risk = (% Position Size) X (% Trade Risk)
Guarantee a trading career with no large losses!
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#ship30for30
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