Protect your capital and maximize profits with professional risk management strategies
Risk management is the difference between profitable traders and those who lose their accounts. In 2025, with increased market volatility and algorithmic trading, proper risk management is more crucial than ever.
Safest approach for beginners and capital preservation
Balanced approach for experienced traders
Higher risk for experienced traders only
Not recommended - high probability of account loss
Use this calculator to determine the proper position size for your trades based on your risk tolerance.
Pro Tip: Never risk more than you can afford to lose. Start with 0.5-1% risk per trade until you're consistently profitable.
Place stops beyond key technical levels like support/resistance, swing highs/lows, or trend lines.
Set stops at a fixed percentage below your entry price (e.g., 2% for stocks, 1% for forex).
Use indicators like ATR (Average True Range) to set stops based on market volatility.
Close positions after a certain time period if they haven't reached your target.
Even with a 40% win rate, you'll be profitable with 1:2 risk-reward
Consequence: Unlimited downside risk
Solution: Always set stops before entering trades
Consequence: Turns small losses into big losses
Solution: Only move stops in your favor
Consequence: Account blown on few bad trades
Solution: Never risk more than 1-2% per trade
Consequence: False diversification
Solution: Monitor currency correlations
Consequence: Emotional decisions lead to bigger losses
Solution: Take breaks after losses
Consequence: Need unrealistic win rates
Solution: Target minimum 1:2 risk-reward
Consequence: Inconsistent risk exposure
Solution: Use position size calculators
Get advanced risk management tools and real-time alerts to protect your trading capital.