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Risk 5 min
Risk Management
Survive long enough to win big. Rules for losses, tilt, and protecting green days.
Core principles
No trader has a 100% win rate. The goal is to survive as long as possible by having big wins and small losses.
- Cut losing trades. Do not hope for losers to come back, and never add to losing positions.
- Trim trades and leave runners with stops moved to break even.
- Once you hit a daily profit goal (e.g. $500), stop trading for the day.
- Do not trade on emotion.
- When the market is slow or choppy, DO NOT TRADE. Overtrading leads to non-A+ setups, losses, and tilt.
- When you trade on tilt, you will lose.
- Do not short the lows. Do not long the highs. Wait for pullbacks.
- Journal every trade.
Correct your weaknesses
Identify your specific leaks and write rules around them. Examples:
- Taking trades after hitting your profit goal.
- Adding too much size after losing a trade.
- After 1–2 losses, step away from the desk — or don't come back at all that day.
- Stop trading after 1 PM.
How to deal with a losing streak
- After 2 red trades, stop for the day.
- Second red day in a row — trade half size.
- Third red day — trade even lower size.
- If losses continue, take a few days off and journal your trades. Find the mistake and fix it.
How to trade after a big win
- Lower your profit goal and max loss after big wins to protect previous gains.
- Most traders try to size up or chase after a big win — the market humbles them quickly. Stay low size.