🤔💰 Position sizing is *the* skill separating surviving accounts from blown ones. Trust me, I blew my first $600 learning this. The 1-2% rule is your safeguard: never risk more than 1-2% of your capital on *any single trade*.
Let's say you have $1000. Your absolute maximum risk per trade is $10 (1%). You eye BTC futures. Entry at $60,000, Stop Loss at $59,900. Your risk per full BTC contract is $100 ($60,000 - $59,900). Since you can only risk $10, you can only open a position of $10 (your maximum risk) / $100 (risk per contract) = 0.1 BTC. This means you'd trade 0.1 of a BTC contract.
Why does this work? If you lose 10 trades in a row, you've only lost $100, leaving you with $900. Risking more, say 10% ($100 per trade), means 10 losses and your account is toast. This rule ensures you...
Let's say you have $1000. Your absolute maximum risk per trade is $10 (1%). You eye BTC futures. Entry at $60,000, Stop Loss at $59,900. Your risk per full BTC contract is $100 ($60,000 - $59,900). Since you can only risk $10, you can only open a position of $10 (your maximum risk) / $100 (risk per contract) = 0.1 BTC. This means you'd trade 0.1 of a BTC contract.
Why does this work? If you lose 10 trades in a row, you've only lost $100, leaving you with $900. Risking more, say 10% ($100 per trade), means 10 losses and your account is toast. This rule ensures you...